Additional Compliance After Completing China’s Annual CIT Filing: What Businesses Need to Know

For foreign-invested enterprises (FIEs) operating in China, completing the Annual Corporate Income Tax (CIT) filing is a major milestone in the fiscal calendar. However, the journey doesn’t end with the submission of the CIT return. China’s regulatory environment imposes several additional compliance requirements that must be met to ensure full legal and tax conformity. Failing to meet these obligations can result in administrative penalties, loss of tax benefits, or even reputational damage. In this blog, we outline the key post-CIT filing compliance steps and how your business can stay ahead of regulatory expectations.

1. Annual Financial Audit

Upon completion of the CIT filing, companies must engage a licensed Chinese CPA firm to conduct an annual financial audit. This is mandatory for all FIEs, regardless of size or industry. The audit provides a detailed review of the company’s financial statements and validates the accuracy of the reported income, expenses, and taxes paid. The audit report is essential for subsequent filings, such as the annual reporting to the Administration for Market Regulation (AMR).

Tip: Start audit preparation early by organizing accounting documents, ensuring accurate bookkeeping, and clarifying any intra-group transactions that may affect tax positioning.

2. Annual Related Party Transactions Filing (Transfer Pricing Documentation)

If your business engages in transactions with overseas affiliates or related entities, you are subject to China’s transfer pricing regulations. Following the CIT filing, companies must assess whether they meet the thresholds for preparing and submitting contemporaneous documentation, including:

• Master file

• Local file

• Special issue file (if applicable)

FIEs must also complete the "Annual Related Party Transactions Form" as part of their CIT filing. However, additional documentation may be requested by tax authorities during routine audits or transfer pricing reviews.

Best Practice: Maintain clear intercompany agreements and regularly benchmark related-party pricing against market standards to minimize audit risks.

3. Annual Reporting to the AMR

Separate from tax compliance, all companies in China must file an Annual Report with the local Administration for Market Regulation (AMR) by June 30 each year. This report includes:

• Business operations overview

• Equity structure and shareholder contributions

• Information on licenses and permits

• Contact details and other corporate disclosures

The AMR report is publicly accessible, so it also serves as a reputational touchpoint with potential partners and regulators.

4. Foreign Exchange Annual Reporting

Businesses that have received foreign investment or conduct cross-border transactions must complete an annual foreign exchange compliance filing with the State Administration of Foreign Exchange (SAFE). This report verifies the authenticity of foreign exchange inflows and outflows and ensures alignment with China's capital controls.

Deadline: Typically required between April and June, depending on local SAFE bureau guidelines.

5. Review of Preferential Tax Treatments

Companies that benefit from preferential CIT rates or other tax incentives (such as High and New Technology Enterprise (HNTE) status or tax deductions for R&D activities) must assess and sometimes reapply to retain their benefits. Authorities may also require additional supporting documentation during this time.

Action Point: Proactively monitor the validity period of any incentive qualification certificates and prepare for re-certification in advance.

6. Data Security and Compliance with Emerging Policies

China’s regulatory landscape is rapidly evolving, with growing emphasis on data security, anti-money laundering, and ESG reporting. While not yet mandatory for all enterprises, forward-looking companies are starting to align their internal compliance processes with these emerging standards.

How Woodburn Can Support Your Compliance Journey

Navigating the post-CIT filing landscape in China can be complex, especially for foreign-invested enterprises facing linguistic, cultural, and regulatory barriers. At Woodburn Accountants & Advisors, we provide end-to-end compliance solutions tailored to your company’s specific structure and industry. From managing your annual financial audit and preparing transfer pricing documentation to overseeing AMR filings and foreign exchange reports, our team ensures you meet every regulatory obligation seamlessly and on time.

With over 20 years of on-the-ground experience in China, Woodburn acts as your compliance partner, not just your service provider. Reach out today to discover how we can help protect your operations and unlock new growth opportunities in the Chinese market.

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Woodburn Accountants & Advisors is one of China and Hong Kong’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

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