Tax Update June – Notification on nation-wide Tax Audit Plan 2015

By Grace Shi, ECOVIS Beijing

Notification on nation-wide Tax Audit Plan 2015

As a result of its national tax meeting the State Administration of Taxation (“SAT”) has recently published an internal notification for the nation-wide tax audit plan 2015. The most important points of the notification can be summarized as follows:

In the future business entities with mandatory tax audits are enterprises…

• with VAT export refund business
• engaging in the gold trading business
• engaging in capital related transactions

Tax audits are optional for…

• enterprises in the real estate industry as well as the construction & installation industry
• individuals with high income (Individual Income Tax)
• profitable education and training institutions

 Moreover, key taxpayers with large annual tax payments to the tax bureau will be selected randomly for audits. The Tax Audit Plan 2015 is carried out from April to November 2015, while the scope currently includes year 2013 and year 2014. The tax bureau, however, may also cover the year 2015 or even extend the period to previous years.

 Ecovis Observations:

We noticed that recently the local tax bureau in Chaoyang District has sent out tax inspection letters to companies within its jurisdiction. According to the information we obtained, this is a regular check on expatriate’s Individual Income Tax (IIT). The letter requests companies to prepare a “self-inspection report” on the IIT of their expatriates. Although this is not a tax audit directing to specific companies, if your company receives the above mentioned kind of inspection letter, it is required to report the relevant information accordingly. However, providing wrong or incomplete information may result in a tax audit, if the tax bureau finds out valuable leads. Besides these inspections, the tax authorities may also identify specious cases within some companies, regarding IIT or overseas insurance fees.

If you have further quaestions or you need help regarding the current inspections, please contact your local ECOVIS office for further consultation: +86 10 6561 6609 – 811

	Grace Shi is a partner at ECOVIS Beijing China. She has over 12 years of experience in accounting, auditing, and tax advisory services in both international accounting firms and large Chinese corporations. She has an international MBA and a US Global Finance Master’s degree. Since 2001, she is a Chinese Certified Public Accountant (CPA) and, since 2002, a Chinese Certified Taxation Agent (CTA). Mrs Shi is one of the founders of ECOVIS R&G Consulting Ltd. (Beijing). She has perfect skills in written and spoken English and Chinese. For more information, please contact: grace.shi@ECOVIS.com
Ecovis Beijing is the trusted tax and legal advisor of several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up to our Newsletter, give us a call +86 10-65616609 (ext 811/806) or contact us directly via Beijing@ecovis.com.

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