Withholding Tax in China - Application Procedures

Withholding Tax in China
Updated Regulations

Application Procedures for
Approval from Tax Bureaus

WHEN should you submit an application?
Before you make any foreign payments aboard for interest, royalties, service fees, contracted work, etc…
Before actual costs or expenses are recorded by the company.
Note: Banks require a Tax Certificate from both national and local tax bureau before a overseas payment exceeding $30,000 USD can be made.
If overseas payment is less than $30,000 USD, approval from the tax bureau is not required.
Application Procedure for Approval

WHO can submit an application?
The payer is a company based in China;
Dividend;
Interest;
Property Transfer;
Royalty.
If the payer does not make an application, the receiver of funds may apply for approval themselves, or appoint an agent to withhold taxes on their behalf.
- Service fee;
- Contract work.

WHERE to submit the application?
First, submit to the National Tax Bureau
Then, to Local Tax Bureau

Required Documents
Record of Contract Registration Form for Enterprise Income Withholding Tax;
Application Letter that specifies contract signing and expiry date, contract amount, currency, exchange rate, party responsible for tax payment, tax calculation sheet, etc…
Business License (original and copy)
Tax Registration Certificate (original and copy)
Contract(s) and invoice(s) in Chinese and English (original and copy);
Application for treatment under bilateral tax agreements (if applicable);
Board resolution(s) for dividend payment(s) (if applicable);
Annual Audit Report(s) for year(s) of interest payment (if applicable);
Explanation for any discrepancies in above payments (if applicable).

Application Process
Prepare required documentation. Document required are similar for both national and local tax bureaus;
Submit application to National Tax Bureau for preliminary review;
If application is in order, pay taxes within 7 days and obtain proof of tax payment from bank. E.g. payment receipt.
Submit application and proof of tax payment receipt to National Tax Bureau for approval to obtain Tax Certificate;
Once Tax Certificate is obtained, submit certificate with above required documents to Local Tax Bureau.
Once Tax Certificate has been certified by the local tax bureau, the Tax Certificate can be submitted to bank to make overseas payment.

Contact Us
NCO China
tel: +86 (10) 8447 8118
fax: +86 (10) 8447 9349
e-mail: enquiry@ncochina.com
website: www.ncochina.com

Withholding Tax in China - Application Procedures

by NCO China on Jan 21, 2011

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