China Tax - Representative Office Registration and Tax Compliance
The application by a foreign company to set up a representative office in China is a bureaucratic process. After obtaining their business licenses, representative offices must go through registration formalities with the local bureaux of quality and technical supervision, local tax bureaux, local statistics bureaux, etc. At that time, the tax reporting method (e.g. the cost-plus method) should be negotiated.
PRC tax returns and payments are required quarterly (for income tax) and monthly or quarterly (for business tax). Late filings are subject to penalties and surcharges. Inconsistency between the operating expenses reported and the representative office's permitted scope of activities or its individual income tax reporting can lead to penalties and surcharges on a tax audit.
Our Tax & China Business Advisory specialists can set up a representative office on your behalf and deliver the business license and other registration certificates to you. We can assist you in negotiating with the tax bureau to use the most appropriate tax reporting method for your representative office. We can prepare the income tax and business tax returns on your behalf and lodge them with the tax authorities. We can also advise you of tax planning opportunities that might help mitigate the tax costs of the representative office and its staff. We can also assist your representative office with the annual renewal and other applications for changes.