The final settlement of non-resident enterprise income tax (hereinafter referred to as EIT) for 2022 is currently in progress. Which enterprises need to make the final settlement? When to do it? How to do it? What documents do you need to submit? Here is what you need to know.
Q1: Do non-resident enterprises established in accordance with the laws of foreign countries (regions) and whose places of effective management are not located in China but have establishments or places of business in China (hereinafter referred to as taxpayers), need to make final EIT settlement only when they have made profits?
Such non-resident enterprises are required to make final EIT settlement regardless of making profit or loss.
Q2: When is the time limit for the final settlement of non-resident EIT?
The taxpayer shall file the annual tax return of EIT to the tax authorities within five months from the end of the fiscal year, make the final settlement, and settle the payable and refundable taxes.
In case of termination of business in the middle of a year, the taxpayer shall file the final settlement of EIT of the current period to tax authorities within 60 days from the actual termination of business.
Q3: What conditions need to be met for non-resident enterprises to choose consolidated tax filing?
Non-resident enterprises that choose consolidated tax filing shall meet all of the following conditions throughout the taxable year:
(1) The establishments or places have registered in competent tax authorities and obtained their taxpayer identification numbers;
(2) The main establishments or places of business shall comply with provision 126 of Implementing Regulations of PRC Enterprise Income Tax Law, and all the establishments and places of business which choose consolidated tax filing shall not use a verified tax rate to calculate and pay EIT;
(3) The establishments and places of business shall accurately allocate their tax payments according to the STA Public Notice  No. 12, and file tax returns to their competent tax authorities.
Q4: What documents do enterprises need to submit for the final settlement of non-resident EIT?
(1) Annual Tax Declaration Form for the Non-Resident Enterprise Income Tax of the People's Republic of China (2019 version) and the attachments;
(2) Annual financial and accounting reports or financial statements;
(3) Enterprise Annual Reporting Forms for Related Party Transactions of the People's Republic of China (for taxpayers who have related party transactions);
(4) Information Reporting Form for Non-resident Taxpayers Claiming Treaty Benefits (for taxpayers who enjoy treaty benefits and haven't filed the form before);
(5) If taxpayers entrust intermediaries to file annual EIT return, the original letter of authorization signed by taxpayers shall be submitted;
(6) Other related documents that should be submitted as specified by the tax authority.
Q5: How to make final settlement of non-resident enterprises?
Visit Electronic Tax Services of Shanghai (上海市税务网), or go to the tax service hall to make final settlement.
(1) Once on the website, download eTax@SH 3 (Windows version).
(2) The Annual Tax Return of Non-resident EIT (2019 version) is available for download on E-Tax Services of Shanghai.