Representative offices of foreign enterprises belongs to non-resident companies, the relevant final settlement of corporate income tax and its execution should be based on the State Administration of Taxation Issued " Non-resident Income Tax Final Settlement Enterprise Management Approach" the Notice ( Guo Shui Fa [ 2009 ] 6). The agency shall, since end of the year, within five months, submit an annual corporate income tax return and arrange final settlement, or to settle the payable tax refund. Meanwhile, representative bodies, if in the middle of the year, discontinue its operations activities, shall within 60 days from the date of termination, go to the tax authorities apply for the current corporate income tax for final settlement.
"Non-resident Enterprise Income Tax Final Settlement Management Approach" ( Guo Shui Fa [ 2009 ] No. 6 ) provides that the legal liability includes:
- ( A ) An enterprise which fails to file an annual income tax return before deadline and it has not been approved by the relevant tax authorities, or any delays in reporting, or submit information or materials which is incomplete or does not meet the requirements, has to be, upon served receipt from the tax authorities, order rectification notice and request for re-submission immediately.
Failing to file an annual corporate income tax return before deadline and which has not been approved by the relevant tax authorities, or any delays in reporting in accordance with the provisions of the Tax Administration Law, is punishable by a fine of RMB 2,000, and if it fails again within the time limit, a fine of RMB 2,000 to RMB 10,000, and for its annual tax payable, it would be ordered to pay within the deadline. The enterprises, upon receiving the service from the relevant tax authorities "Non-resident Enterprise Income Tax Payable Approval Notice" ( see Annexure - 4 ), shall pay tax within the prescribed time limit.
- ( B ) An enterprise whcih fails to arrange the final settlement of its corporate income tax within the prescribed time limit, unless as ordered another deadline by the tax authorities, if overdue payment, in accordance with the provisions of the Tax Administration Law, is subject to late penalty.
- ( C ) Should the business entity has dispute with the tax authorities on tax issues, they should act in accordance with the relevant provisions of the Tax Administration Law.