In accordance with the Enterprise Income Tax Law of the People's Republic of China and its implementing regulations, the Law of the People's Republic of China on the Administration of Tax Collection and its implementation rules, the Announcement of the State Administration of Taxation on Improving the Management of Related Party Declarations and Contemporaneous Information (Announcement No. 42 of 2016 of the State Administration of Taxation, hereinafter referred to as "Announcement No. 42"), and the Notice of the State Administration of Taxation on Several Measures to Further Deepen the Reform of "Delegating Power, Delegating Power and Improving Services" in the Tax Field, Cultivating and Stimulating the Vitality of Market Entities (General Tax Collection and Branch Administration [2021]) No. 69, hereinafter referred to as "Circular No. 69"), the relevant matters of the related declaration are hereby reminded as follows:
When is the related party declaration made?
Taxpayers should make the 2023 related party declaration when submitting the 2023 enterprise income tax return, that is, the deadline is May 31, 2024.
If an enterprise has difficulties in submitting the annual report form on related party business transactions within the prescribed time limit and needs to be extended, it shall handle it in accordance with the relevant provisions of Article 27 of the Law of the People's Republic of China on the Administration of Tax Collection and Collection and Article 37 of its implementation rules.
How do I determine whether I need to make a related party declaration?
If a resident enterprise that implements audit and collection and a non-resident enterprise that has established an institution or place in China and declares and pays enterprise income tax truthfully has business dealings with its related parties during the year, the Annual Report Form on Related Party Business Transactions of Enterprises of the People's Republic of China (2016 Edition) shall be attached to the annual enterprise income tax return.
If an enterprise does not have business dealings with its related parties during the year, but is required to submit a CbC report in accordance with Article 5 of Announcement No. 42, it shall only fill in the Reporting Enterprise Information Form and the 6 forms of the CbC report.
If an enterprise has no business dealings with its related parties during the year and does not meet the requirements for submitting the CbC report, it may not make a related party declaration.
How can I tell if there is a relationship?
Related parties refer to enterprises, organizations or individuals with the following seven relationships, which can be summarized as equity relationship, capital lending relationship, concession relationship, purchase, sale and labor relationship, appointment or delegation relationship, kinship relationship and substantive relationship. See the following table for specific judgments.
Exemptions: Article 3 of Announcement No. 42 stipulates that if the circumstances in items (1) to (5) of the table exist only because of the state's shareholding or the appointment of directors or senior management personnel by the state-owned asset management department, it shall not constitute an affiliated relationship.
What is an affiliated business dealing?
Related-party business transactions refer to the related-party transactions between an enterprise and its related parties, mainly including: the transfer of the right to use or ownership of tangible assets, the transfer of financial assets, the transfer of the right to use or ownership of intangible assets, financing and labor transactions.
When making a related party declaration, taxpayers should select "fill in" or "not fill" in the "Filling Form for Annual Related Party Business Transaction Report of Enterprises" according to their own tax-related business.
How do I determine if I have met the criteria for filing a CbC report?
Resident enterprises with one of the following circumstances shall fill in the CbC report, that is, meet the CbC report reporting standards: 01
01
The resident enterprise is the ultimate holding enterprise of the MNE group (an enterprise that can consolidate the financial statements of all the member entities of the MNE group to which it belongs and cannot be included in the consolidated financial statements by other enterprises), and the total amount of various types of income in the consolidated financial statements of the previous fiscal year exceeds RMB 5.5 billion;
02
The resident enterprise has been designated by the MNE group as the reporting enterprise for the CbC report.
How does an enterprise make a related party declaration?
Taxpayers can download the annual report form of enterprise income tax > of the People's Republic of China on enterprise income tax (2016 edition) by visiting the homepage of the website of the Xiamen Municipal Taxation Bureau of the State Administration of Taxation > the tax service > download center to download the >> annual report form of enterprise income tax of the People's Republic of China (2016 edition) or scan the QR code below for more detailed guidelines for filling in related party declarations.
Download the form:
http://xiamen.chinatax.gov.cn/xmswcms/content/1035262310.html