Shenzhen Businesses: Register Tax Personnel by February 28

By Dezan Shira & Associates

Posted: 19th January 2018 08:21

Shenzhen has implemented a new rule requiring all businesses in the city to register key tax personnel with the local tax bureau. The move aims to enhance businesses’ commitment to comply with tax-related laws by registering and verifying the individual personnel responsible for such issues.

Tax authorities in Shenzhen implemented the rule for newly set up companies as of July 1, 2017, and then expanded them in November to include all taxpayers. Guangdong province, as well as many other regions in China, began implementing this rule in 2016, but Shenzhen was excluded from the initial rollout.

The originally determined deadline for businesses in Shenzhen to register their real name authentication has been postponed from December 31, 2017 to February 28, 2018. Despite the change in deadline, businesses that have not yet done so are advised to register as soon as possible to avoid disruption of tax-related business activities. Businesses located elsewhere in China should ensure that they are up to date with the implementation of the rule at the local level.

Real name authentication registration process

According to the real name authentication rules, key tax-related personnel in every company have to register with the local tax bureau.
Personnel in the following tax-related positions are required to conduct real name authentication:
Other tax personnel authorized by the legal representative (其他相关办税人员).

Based on a new document released by the Shenzhen tax bureau on December 28, 2017, legal representatives satisfying one of the following
conditions can be exempted from the real name authentication requirement:

Local personnel can register online or in-person; however, foreign personnel have to apply in-person as a Chinese ID card number is required for the online registration.

In-person applicants can apply at either a national tax office or a local one. If the real name authentication is conducted with a local tax bureau, applicants that manage issues related to the national tax office need to also register their photo and facial information with the national tax office.

Amber Liu, Senior Accounting and Tax Manager at Dezan Shira & AssociatesShenzhen office, said, “Unfortunately, there is no online channel for foreigners to complete this authentication process, which means that foreigners have to go to the tax bureau counter in-person to register. As most foreign businesses have a foreigner appointed as a Legal Representative or Finance Manager/CFO, they need to physically go to China to visit the tax bureau.”

Liu continues, “Alternatively, foreign businesses can change their CFO to a local staff member who can visit the tax bureau in-person, or enlist a third party firm to handle their tax and accounting matters.”

If the registration is successful, the tax bureau will record the following information of the personnel:

Notably, the exact positions requiring registration and the documents needed for registration vary depending on the region.

Moreover, if a business’ key tax personnel changes or the personnel’s information changes (such as their phone number), the real name authentication information should be changed with the bureau accordingly.
With the rules, only personnel registered with the tax bureau are able to carry out various day-to-day tax activities in-person, such as purchasing special VAT fapiao. Those who have not registered are unable to carry out these activities. However, those with an active online account with the local tax authorities will still be able to carry out activities online.

Liu warned, “Failure to register real name authentication will cause great inconvenience on a company’s normal tax-related operations. If one fails to register, their ability to conduct regular tax activities will be impeded, including being unable to purchase VAT fapiao, correct electronic tax returns, reset the online tax bureau login password, and increase monthly VAT fapiao quota, depending on their location.”
Real name authentication implementation timeline

The real name authentication requirements were first announced in 2016, and have been rolled out across the country at various stages.

The rollout has proceeded as follows:
The stipulated transition period was originally set to end on December 31, 2017, but has been extended to February 28, 2018. After that, tax personnel without registering their real name authentication will not be able deal with tax matters at the tax office.

The main purpose of real name authentication is to verify the key personnel in charge of tax matters to enhance their commitment to comply with tax laws. However, according to Liu, it is also designed to improve the quality of government tax services, as a tax certificate copy or ID certificate copy will no longer be required every time one deals with tax issues at the bureau.

Businesses in Shenzhen that have not yet registered should do so before the February 28 deadline. Investors located elsewhere in China that have not yet registered are advised to liaise with the local tax bureau to inquire whether it is required to do so in that region.

If you and your business require further advice regarding this compliance requirement, please contact our office in Shenzhen or any of our other offices in China.

This article was originally published on December 18, 2017 and has been updated with the latest regulatory changes.
 
This article was first published on China Briefing.

Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll, and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India, and ASEAN, we are your reliable partner for business expansion in this region and beyond.

For inquiries, please email us at info@dezshira.com. Further information about our firm can be found at: www.dezshira.com.

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