As New Year is approaching, the business at the end of the year is inevitably a little busy.
For the normal operation and good development of the enterprises next year, enterprises can start preparing for the annual inspection!
What is the annual inspection
of enterprises?
Enterprises are required to undertake the annual inspection every year, whose aim is to review the management conditions of enterprises.
The annual inspection of enterprises can be divided into the following two parts:
Industrial and commercial annual inspection
Tax annual inspection
Both are very important for enterprises.
01
Industrial and commercial annual inspection
Industrial and commercial annual inspection means that the industrial and commercial administration will conduct checks on the industrial and commercial tax and management conditions of enterprises in accordance with law. Enterprises need to fill in the data of their balance sheets and the income statements and so on.
After registering with the Industrial and Commercial Bureau, enterprises have obligations to submit annual reports to the registration authority and make public announcements to the society, which helps the public and the relevant administrative departments have a basic understanding of the enterprises as well as their management conditions.
02
Tax annual inspection
Tax annual inspection means that tax authorities will check whether enterprises pay their taxes and settle the annual enterprise income tax according to the relevant laws and regulations.
Source: State Taxation Administration
According to Article 54 of the Law of the People’s Republic of China on Enterprise Income Tax, enterprises shall submit the annual enterprise income tax return to tax authorities, make final settlement and payment, and settle its payable and refundable tax, within five months after the end of taxable year.
ATTENTION
Time for the annual inspection of enterprises
Industrial and commercial annual inspection
Jan 1 to Jun 30 every year
Tax annual inspection
Jan 1 to May 31 every year
Enterprises that need to undertake the annual inspection
All enterprises, non-corporate enterprises, partnerships, sole proprietorship enterprises, branches, individual businesses that registered and got business licenses before December 31 last year.
Benefits from the annual inspection of enterprises
01
Enterprises can further understand their management conditions of the previous year, which is conducive to find their problems and change their tactics, and it is good for the sound development of enterprises.
02
Enterprises can further understand their management conditions of the previous year, which is conducive to find their problems and change their tactics, and it is good for the sound development of enterprises.
03
Enterprises’ legitimate rights and interests will be protected, for the National Enterprise Credit Information Publicity System effectively strengthens the supervision and management of enterprises, and has a deterrent effect.
04
Enterprises can timely check errors and prevent leaks in their past tax affairs through tax annual inspection, so that they can avoid financial risks.
Consequences of enterprises
if they fail to do
annual inspection on time
Enterprises will be added to the abnormal business list by the industrial and commercial administration if they don’t submit annual reports on time. If enterprises are not removed from the abnormal business list after 3 years, they will be added to the list of serious illegal and dishonest acts, which is also called the blacklist.
There are some bad effects on enterprises and the relevant person in charge of enterprises, once enterprises are added to the abnormal business list or blacklist.
Enterprises on the blacklist are restricted in bank loans, investments, bidding and tendering, entry and exit, government procurement, and so on.
Enterprise legal persons will be limited in registering new companies and the reputation of shareholders and other managers will also be affected, which makes they unable to get bank loans, take high-speed trains and buy airplane tickets, if their enterprises are on the blacklist.
Enterprises’ credit will be questioned when they cooperate with others, for they are on the blacklist, and it will seriously affect the long-term development of enterprises.
Enterprises will be fined if they fail to submit annual reports on time for more than two years.
Enterprises will be fined 5,000 yuan if they fail to submit annual reports on time for two years; they will be fined 10,000 yuan if they fail to submit annual reports on time for more than three years.
Individual businesses will be fined 100 yuan to 1,000 yuan if they fail to submit annual reports on time and refuse to make correction.
HACOS Suggestions
Prepare for the annual inspection
of enterprises early!
If you want to know more, please free to contact our consultants or leave your message.
