China has become a magnet to international investments, attracting a lot of investors in different sectors. In 2020, China received US$163 billion in direct foreign investments, which surpassed what the US got by about US$12 billion. China is an awesome offshore investment jurisdiction because of the support according to businesses. This is the reason why it has become the biggest manufacturing hub in the globe. So, if you are planning to move to the Chinese market or have already established some presence, the biggest question is how do you grow your enterprise? The answer is a good strategy and superb accounting.
When it comes to tax and accounting, they can take a lot of your precious business time in China. After company incorporation in China, working with tax and accounting services can give you the leverage needed for rapid growth. This post takes a closer look at what to anticipate from outsourcing tax and accounting services in China.
Facts about Tax and Accounting in China
The corporate tax rate for companies in China is 25%. However, there are some exceptions. For a company categorized as small-scale (enterprise with a turnover of less than CYN 3 million), the corporate tax is 5% for its annual taxable income of less than CNY 1 million. In the case of High and New Technology Enterprises (HNTE) and Technology-Advanced Service Enterprises, the corporate tax is set at 15%.
Other companies that enjoy reduced tax rates of 15% are those in the encouraged areas and pollution control niches. Software development firms enjoy an even lower rate of 10% in corporate taxes. Note that this is only the corporate tax. You will also need to meet the following additional types of taxes:
- Turnover taxes.
- Resources taxes.
- Property taxes.
- Custom duty.
- Tax for special purposes.
When it comes to accounting, China uses the Chinese Accounting Standards (CAS), which are significantly different from the International Financial Reporting Standards (IFRS). It often results in huge confusion for many foreign companies, and it is crucial to work with the right tax and accounting services in China. These services are offered by certified public accountants, and you can be sure of one thing; your accounting will be completed on time and in compliance with all related laws in China.
Top Tax and Accounting Services You Can Outsource in China
When you contract top-rated tax accounting services in China, the experts can help you in a number of things, including the following:
Finance and Accounting
- Bank and other types of payments and their management.
- Monthly bookkeeping.
- Financial reporting.
- Monthly tax filing.
- Tax clearance.
- Annual audit.
- Chops management.
Payroll Services
- Income tax optimization.
- Calculation of social contribution.
- Determining staff pay.
- Drafting employment contracts.
Project Work
- Regular checks, such as corporate health and legal assessments, ensure your company is compliant with all legal requirements.
- Running financial due diligence for your company.
- Project management for the application of new technology enterprises.
The Benefits of Using Tax and Accounting Services in China
The primary advantage of using tax and accounting services in China is that you have more time to handle the core business tasks as experts professionally deal with taxes and bookkeeping. Other benefits include:
- You get access to accounting services from experts.
- The experts can train your staff on different aspects of accounting.
- Helps to cut the cost of operations.
- The professionals can help you to build or craft better strategies for growth.
- You are sure of compliance with Chinese Accounting Standards and tax policies.
When it comes to matters of taxes and accounting, China is very strict and it is paramount to get it right. As we have demonstrated in this post, the best route to follow is working with tax and accounting services in China. These professionals not only help with bookkeeping but can also come in handy to ensure your firm is exploring all the available opportunities for fast growth.
