Urgent announcements on PRC annual individual income tax reconciliation filing for year 2019

On 1 April 2020 the Chinese State Taxation Administration (STA) issued an announcement for PRC Annual IIT Reconciliation Filing for Year 2019. The announcement provides detailed guidance on the 2019 Annual Consolidated Income Tax Reconciliation (ATR) filing.

The Chinese tax government has strengthened the administration and control of PRC IIT with the implementation of new PRC IIT law and regulations. In order to be fully compliant with the PRC ATR filing requirement, we would suggest withholding agents/individuals pay close attention to the below aspects:

Review individuals’ personal situation and monthly tax filing data to see if they are inconsistent with relevant requirements as soon as possible;
Pay close attention to further practical guidance published by the local tax authorities regarding ATR filing and seek professional assistance if necessary.

Emphasis on Punishment of Non-compliance Behaviours

The Chinese SAT also emphasised that if individuals do not file the reconciliation return accurately and on time, they will not only demand that the individuals pay under-reported tax liabilities, but also impose a late payment surcharge at a daily rate of 0.05% on the tax due as well as a penalty. In addition, the non-compliance behaviour should be recorded in the personal tax credit system which will affect the individuals’ credit reputation.

Gordon Gao
gordon.g@bdo.com.cn

Rebecca Chen
rebecca.chen@bdo.com.cn