General Guides
Regional Guides
Starter GuidesAt MSA, we recognize the commercial importance of assurance, and we support our clients and their stakeholders to make informed decisions based on reliable and verifiable information. Our team of audit- and assurance experts supports an array of clients from a broad range of industries to meet Chinese compliance requirements, performs internal audits but also goes beyond regulatory requirements to support with the enhancement of your performance and ensure our clients are well positioned for growth.
Our team has vast experience with Chinese national statutory requirements as well as group reporting packages, group component audits and international reporting standards such as IFRS, IAS and GAAP. In principle our team ensures strict compliance with Chinese national audit regulations, while we provide advice in an international context.
To learn more about the Chinese statutory audit requirements and how we support our clients with these matters, please click the respective links for China Statutory Audit, Annual CIT Filing and the Annual Publication Report.
China Assurance Services
- Chinese Compliance Audits: We assist clients in meeting Chinese compliance requirements. Our services ensure that your business operations adhere to all relevant local regulations, minimizing the risk of penalties and legal issues, and maintaining your good standing with regulatory bodies.
- Internal Audits: We perform internal audits or Corporate Health Checks for clients. Our internal audit services provide an independent assessment of your company’s internal controls, risk management, and governance processes, helping to identify areas for improvement and enhance operational efficiency.
- China Statutory Audit Support: We support clients with Chinese national statutory audit requirements. We guide you through the mandatory annual audit process, liaising with local CPA firms, preparing necessary documentation, and ensuring a smooth and compliant audit experience.
- Annual CIT Filing Support: We assist clients with Annual CIT Filing. This includes understanding of China’s Corporate Income Tax (CIT) regulations, ensuring accurate reconciliation of annual tax liabilities, and preparing the necessary documentation for submission to the relevant tax authorities.
- Annual Publication Report Support: We prepare Annual Publication Reports for clients. This involves compiling and submitting the required company information to the Chinese Administration for Market Regulation (AMR) and other relevant government bureaus, ensuring compliance with the annual reporting procedures and deadlines.
Benefits of our China Assurance Services
- Ensured Regulatory Compliance: We ensure your company adheres to all relevant Chinese regulations, minimizing the risk of penalties, legal issues, and reputational damage.
- Enhanced Internal Controls: We help you identify weaknesses in your internal controls and implement improvements, strengthening your company’s operational efficiency and risk management.
- Streamlined Operations: We simplify complex processes like group reporting and annual reporting, freeing up your resources to focus on core business activities.
- Global Reporting Alignment: We assist in preparing financial statements according to international standards (IFRS, IAS, GAAP), facilitating seamless communication with international stakeholders.
International Audit
Due to our vast experience in supporting international active clients and because of our international partnerships we are uniquely positioned to support our clients across the scope of their China and international operations.
Together with our qualified China CPA partner and our team of certified accountants and -tax advisors, we support with the conversion of the Chinese annual audit according to group audit requirements, assist with group component audits and perform internal audits in line with international compliance regulations.
Statutory Audit in China
All foreign-invested enterprises in China must complete an annual audit which is performed by a licensed China CPA firm. The purpose of the annual statutory audit is to assess whether the company’s financial statements reflect a true and fair view of the financial position, operating results, and cash flow in all material aspects and in accordance with the Chinese Accounting Standards, or PRC GAAP.
Since the Chinese fiscal year ends by December 31st, the annual audit in China is initiated in the next fiscal year and the audit of the Chinese subsidiary must be completed prior to the annual CIT filing.
Together with our licensed CPA partners we ensure that the annual audit is completed timely and in accordance with Chinese compliance requirements. We provide further guidance to foreign-invested firms to ensure a full understanding of the Chinese audit and its requirements, and support as well with the conversion of the Chinese audit in line with group audit and reporting requirements.
Corporate Credit Report
As of 2020, foreign-invested enterprises in China may be required to obtain a Corporate Credit Report from the People’s Bank of China (PBOC) for completion of their annual statutory audit. As a full stop service provider, MS Advisory has acted as entrusted party to obtain this report for many of our clients and thereby ensure full compliance.
Annual CIT Filing in China
In China, Corporate Income Tax (CIT) is paid on a monthly- or quarterly preliminary basis in accordance with the company’s accounting records. However, due to discrepancies between the Chinese accounting standards and China’s tax legislation, the actual amount of taxable income for CIT purposes may differ from the company’s accounting records. As such, in accordance with Chinese legislation, all companies must submit an annual CIT reconciliation filing to determine whether all tax liabilities have been met and subsequently must either make a supplementary tax payment or apply for tax reimbursement.
The annual CIT filing must be completed by May 31st of the next fiscal year. Foreign-invested enterprises that engage in frequent transactions with related parties should additionally prepare an annual affiliated transaction report on transfer pricing issues supplementary to the annual CIT filing. In certain regions of China, foreign-invested enterprises may as well be required to prepare a separate CIT audit report performed by a China Certified Tax Agent.
We assist our clients to navigate the Chinese taxation environment and support with the development of an understanding as to the differences between Chinese tax law and the Chinese accounting standards. We support as well with the calculation of CIT taxable income and filing of the annual CIT declaration.
China Publication Report
According to Chinese regulations on publicity of corporate information, all foreign-invested enterprises must submit an annual report to the Chinese Administration for Market Regulation (AMR), along with an annual combinative report to the Ministry of Finance and Commerce (MOFCOM), the State Administration of Taxation (SAT), the State Administration of Foreign Exchange (SAFE), and the National Bureau of Statistics (NBS) by June 30th of the subsequent fiscal year. These reports must include the company’s contact information, its existence status, details regarding any investment made, including the establishment of other enterprises or purchase of equity rights, information concerning the company’s registered capital, the amount of paid-in capital and contribution methods, any information concerning a change in equity or ownership of the company, an overview of essential financial information, information regarding customs activities, and an overview of intercompany transactions.
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