Three Departments Provide Clarity on the Filing of Consolidated Enterprise Income Tax Returns by Non-resident Enterprises for Their Own Establishments and Offices
Recently, three departments, including the State Taxation Administration ("STA"), have jointly issued the Announcement on Matters Concerning the Filing of Consolidated Enterprise Income Tax Returns by Non-resident Enterprises for Their Own Establishments and Offices (the "Announcement"), following the Announcement on Publishing the Cancelled Tax Administrative Approval Items distributed by the STA earlier. The Announcement has entered into force immediately from the date of issuance.
The Announcement provides clarity on four issues, including: 1. what requirements a non-resident enterprise shall fulfill if it opts to make tax payments on a consolidated basis; 2. how tax authorities will ensure good services to taxpayers and effective internal coordinated management, while processing matters in relation to consolidated tax returns; 3. from when a non-resident enterprise may make tax payments on a consolidated basis in accordance with provisions set out in this Announcement; and 4. how to make tax payments on a consolidated basis for a non-resident enterprise that has been permitted by the tax authority to do so before the effectiveness of this Announcement. Among others, the Announcement states that a non-resident enterprise selecting to file consolidated enterprise income tax returns shall satisfy three conditions all the way through the year of consolidated filing. One of the three conditions requires that all establishments and offices involved in the consolidated filing have completed the tax registration with the competent tax authority at their respective locality and obtained the taxpayer identification number.