"Be prepared," motto of the Scouting movement, and also Hongda's advice when it comes to being ready for the end of the Chinese tax year.
If the annual China tax and accounting is on the 3oth April, why prepare in advance? Keep reading to find out...
1. You need to pass the annual accounts audit to be able to repatriate profits
You've been working hard all year to make a success of your business in China, taking all that China has to throw at you (good and bad) in your stride; so what's next? The pay-off.
But in order to repatriate your hard-won profits you must undertake an annual China accounts audit and settle any tax liabilities before this can happen. If ever there were a reason to be on top of this, this would be it!
2. Undertaking the China tax and accounting audit allows you to make crucial business changes
The benefit of having up-to-date bookkeeping and undertaking the China tax and accounting audit is that you'll be compliant with local law.
While keeping very compliant bookkeeping and tax records has been overlooked by some companies with little problem in the short term, it would become a problem very quickly if you ever made changes to the company's business in future.
Every time you make a change to business scope, sell shares to an investor, or hire a foreign staff member (amongst other activities), you'd need to interact with the Chinese government. At this point they would request the tax report from the previous year (part of the audit) to check that you have fulfilled tax obligations before allowing you to make these business changes.
3. You'll remain compliant with the Chinese government
There's the right way and there's the corner-cutting way everywhere, but in China we can only recommend doing things the right way.
Failure to remain compliant could mean strict scrutiny from the local government, being blacklisted, and even having your business license revoked leading to a potentially hefty loss of investment.
So these three benefits alone are pretty compelling reasons to prepare for success in your company's bookkeeping and accounts audit in China.
Leaving it to the last minute could lose you the ability to do what you need to succeed in your business, or worse, could lead to your doom.
How to handle the annual China accounts audit?Well, getting expert advice from Hongda is a great idea, as we have been helping foreign-invested companies navigate this minefield for years.
Contact us if you need help with bookkeeping, your tax report, or your annual China accounts audit.
Have you audited your accounts in China before? What did you find easy or difficult about the China tax and accountin audit? What would be the one piece of advise you would share?
Please leave any comments or questions below.