As a Foreign Company, Do I Need to Make Annual CIT Filing in China?

April 28, 2026 Posted by China Briefing Written by Qian Zhou Reading Time: 10 minutes

Annual CIT filing for foreign companies must navigate a complex set of China tax rules that often differ from common assumptions, particularly for non‑resident enterprises operating through branches, project offices, or seconded staff arrangements. This article breaks down the 2026 filing requirements, clarifies who must file, and highlights compliance risks that foreign investors frequently overlook.

Every year, thousands of foreign companies operating in China, whether through a registered branch, a project office, or a permanent establishment (PE) formed by seconded employees, must complete an annual Corporate Income Tax (CIT) reconciliation, also referred to as annual CIT settlement or annual CIT filing. For the 2025 tax year, the filing deadline is May 31, 2026.

Yet non-resident enterprise CIT obligations are widely misunderstood. Many foreign multinationals assume that because their China operations are handled by a locally incorporated subsidiary, they have no separate non-resident enterprise filing exposure. This assumption can be wrong, particularly where seconded staff, cross-border service arrangements, or withholding tax obligations are involved.

This article explains who must file, what the deadline requirements are, how PE status affects the tax collection mechanism, and what questions commonly arise in cross-border service and secondment arrangements.

Non-resident enterprises that have established a branch, project office, or PE in China must file an annual non-resident enterprise CIT return by May 31, 2026 for the 2025 tax year, regardless of whether they were profitable. Foreign enterprises without a China establishment that receive China-source income are subject to withholding tax at source; the domestic payer, not the foreign payee, bears the compliance obligation.

What is annual CIT filing?

The Annual CIT reconciliation is a procedure that the State Tax Administration (STA) requires all relevant taxpayers to conduct within five months of the end of the tax year (from January 1 to December 31) to determine if all tax liabilities have been met and whether the company needs to pay supplementary tax or apply for tax reimbursement.

In the process of conducting the annual CIT filing, companies, both resident and non-resident, need to complete a range of procedures to determine their taxable income and tax payable. This includes preparing pre-tax deduction vouchers, ensuring compliance with audit and reporting requirements, dealing with book-tax differences, and applying any applicable preferential CIT policies.

Who must file: Resident vs. non-resident enterprise

In short, non-resident enterprises that have set up an establishment or place of business in China must file the non-resident enterprise annual CIT return. This includes enterprises operating through registered branches, project offices for engineering or labor service contracts, as well as situations where a PE is deemed to exist, for example, through the secondment of staff to China. To be noted, this filing obligation applies regardless of whether the enterprise generated a profit or incurred a loss during the relevant tax year.

China’s CIT Law draws a fundamental distinction between resident enterprises and non-resident enterprises:

Resident enterprises are incorporated in China or have their actual management organ in China. They are taxed on worldwide income at the standard 25 percent CIT rate and file the standard annual CIT return.
Non-resident enterprises are incorporated under foreign law and do not have their actual management in China. Their China tax exposure depends on whether they have an establishment in China.

For non-resident enterprises, two separate CIT charging rules apply:

Non-resident enterprises with a China establishment or PE: These enterprises are taxed on income attributable to their China establishment, as well as any offshore income that has a real or actual connection to that establishment. They are required to file an annual CIT return for non-resident enterprises in China. The standard CIT rate of 25 percent applies to non-resident enterprises that maintain income‑generating establishments in China.
Non-resident enterprises without a China establishment, or where income has no linkage to an establishment: These enterprises are taxed only on China‑source income, which is collected through withholding tax at source. The domestic payer is responsible for deducting and remitting the tax, and the non-resident enterprise is not required to file a CIT return on its own. A reduced CIT rate of 20 percent, which has been temporarily further reduced to 10 percent, applies.

Category of Non‑Resident Enterprise	Tax Scope	Tax Collection & Filing	Applicable CIT Rate
With a China establishment or permanent establishment (PE)	Taxed on income attributable to the China establishment, plus offshore income with a real (actual) connection to that establishment	Must file an annual non‑resident enterprise CIT return in China	25% standard CIT rate
Without a China establishment, or where income has no linkage to an establishment	Taxed only on China‑source income	Tax collected via withholding at source by the domestic payer; no annual CIT filing by the non‑resident enterprise	20% withholding tax, temporarily reduced to 10%

For more information on CIT in China, please refer to the section on CIT in our Doing Business in China Guide.

Exemptions from annual CIT filing

Two categories of non-resident enterprises are not required to participate in the annual CIT reconciliation for the current year:

Temporary project presence under one year: Non-resident enterprises that came to China solely to undertake a construction or labor service project, where the project ran for less than 12 months within the year, and where the enterprise terminated operations and settled all tax liabilities before year-end.
De-registration completed within the filing window: non-resident enterprises that completed formal de-registration with the tax authority during the annual filing period (i.e., January 1, 2026 to May 31, 2026 for the 2025 year) are not required to file a reconciliation return.

For non-resident enterprises that ceased operations mid-year but do not qualify under the above exceptions, the reconciliation must be completed within 60 days of the actual cessation date, rather than at the standard year-end deadline.

Beyond the two categories mentioned above, other non-resident enterprises have to get approval from the competent tax authorities to not participate in the annual CIT filing.

Filing deadline and process

When must the CIT be settled and paid?

The 2025 annual non-resident enterprise CIT return must be filed by May 31, 2026, the same as that for resident enterprises.

How can companies complete the annual CIT filing?

There are two methods for non-resident enterprises to settle and make the payment declaration for the 2025 CIT:

Making an online declaration via the Electronic Tax Bureau, which is recommended for most filers; or
On-site declaration at the local tax service hall.

Companies can choose to fill in and submit the applicable declaration form through the local Electronic Tax Bureau within the prescribed time limit for settlement and payment and settle the tax payable online. The online filing path is:

Local Electronic Tax Bureau → I Want to Handle Tax Matters → Tax/Fee Declaration and Payment → Corporate Income Tax Filing → Annual Corporate Income Tax Declaration for Non‑Resident Enterprises

If the company cannot apply for the settlement online, an employee can instead bring the relevant materials for settlement and payment to the tax service hall directly.

In addition, if a company discovers that there is an error in the annual CIT filing for non-resident enterprises during the settlement and payment period, it can make corrections either online or at the tax service hall in accordance with the prescribed procedures.

After the return is reviewed by the competent tax authority, the enterprise will receive a Notice of Non-Resident enterprise CIT Reconciliation Matters if a supplementary payment or refund is required. The enterprise must settle any additional tax within the time limits specified in the notice or follow the authority’s instructions to claim a refund.

Practical Tip: Use the Correct Return Form

Non-resident enterprises must use the 2019 Edition Non-Resident Enterprise Annual Tax Return (中华人民共和国非居民企业所得税年度纳税申报表（2019年版）), issued under SAT Announcement [2019] No.16. A common error is filing the standard resident enterprise return instead. The two forms are structurally different; using the wrong one will result in a failed submission and may trigger a follow-up inquiry.

Required filing documents

When submitting the annual non-resident enterprise CIT return, the following documents must be prepared. Where the return is filed electronically and electronic versions have already been submitted, hard copies do not need to be provided separately.

Document	When Required	Notes
Annual CIT return and attachments	Always required	Use the 2019 Edition non-resident enterprise annual return form — not the resident enterprise form
Annual financial statements or financial summary	Always required	Full financial statements or a written financial summary where full accounts are unavailable
Annual related-party transactions report	If related-party transactions exist	Covers transactions between the PE and its head office or affiliates
Tax treaty benefits information report	If treaty relief claimed and not filed at provisional stage	Documents the entitlement to reduced withholding or PE exemption under applicable treaty
Power of attorney	If filed by a tax agent	Original authorization with taxpayer seal or signature

PE and seconded staff: A common risk area

One of the most frequently misunderstood non-resident enterprise CIT issues for multinationals relates to seconded staff arrangements. When a foreign parent company (the Sending Company) sends employees to work at a Chinese affiliate or subsidiary (the Receiving Company), the question of whether that arrangement creates a PE and triggers non-resident enterprise CIT filing and payment obligations for the foreign parent is highly fact-specific.

When a secondment arrangement creates a PE

Under Interim Measures for Tax Administration of Non-Resident Contractors and Service Providers (SAT Announcement [2013] No. 19), a secondment arrangement may be regarded as the sending company providing labor services in China and, as a result, establishing a PE. This is the case where the sending company bears full or partial responsibility and risks for the work outcomes of the seconded personnel, and typically retains authority over their performance evaluation. Where the sending company is a resident of a tax treaty jurisdiction and the arrangement involves a relatively fixed place of business with a certain degree of permanence, it may constitute a PE for tax treaty purposes.

The following factors are used to assess whether a PE exists:

PE Indicator	What It Means in Practice
Fees characterized as management/service fees	The domestic company pays amounts to the foreign sender described as management or service fees, indicating a commercial service relationship beyond mere secondment.
Payments exceed actual cost pass-through	Amounts paid to the foreign entity exceed the direct costs of wages, social insurance, and expenses incurred for the seconded staff, suggesting a profit element retained abroad.
Foreign entity retains a margin	The foreign entity does not remit the full amount received to the seconded employees but keeps a portion consistent with providing a service for profit.
IIT not fully paid in China	Salaries borne by the foreign entity are not fully declared under China’s individual income tax, an indicator that the foreign entity, not the domestic company, is the true employer.
Foreign entity controls key personnel decisions	The foreign entity determines the number of seconded staff, their qualifications, remuneration benchmarks, and their work locations in China, retaining employer control.

Safe Harbor: Shareholder Rights Activities

A secondment arrangement does not create a PE merely because the seconded employees work on the premises of the Chinese entity if their sole purpose is to exercise the Sending Company’s shareholder rights and protect its legitimate interests as an investor. This includes activities such as providing investment-related advice, representing the Sending Company at shareholder meetings, or attending board meetings as a shareholder representative.

Where a foreign parent’s seconded employees are determined to have created a PE in China, the income that the Chinese affiliate pays to the foreign parent for those services is no longer subject to withholding tax collected by the Chinese payer. Instead, the PE must register as a taxpayer and self-file quarterly and annual non-resident enterprise CIT returns. Failure to register and self-file, while the Chinese affiliate also fails to withhold, means neither mechanism operates, and tax goes unpaid. This is a high-risk compliance gap.

Tax registration for PEs without business registration

A common practical problem for non-resident enterprises in the secondment or labor service context is that the PE cannot obtain a business license because it is not a separate legal entity under Chinese company law. Without a business license, the PE cannot go through the standard tax registration process.

The applicable procedure is set out in the SAT Announcement [2013] No. 19

The non-resident enterprise (Sending Company) must register with the competent tax authority at the project location within 30 days of signing the relevant contract or agreement.
The domestic Receiving Company must also file a report with its competent tax authority within 30 days of signing the contract, using the Report Form for Domestic Institutions and Individuals Outsourcing Engineering or Labor Projects to Non-Residents.
The tax authority will assign a tax registration number to the non-resident enterprise based on the contract and filing documents, without requiring a business license. This number is used for all subsequent provisional and annual CIT filings.

Frequently asked questions

The following Q&As are based on published guidance from Chinese tax authorities and address the most common questions that arise in cross-border secondment arrangements.

Q1: A US company (Company A) sends several employees to work permanently at its affiliated Chinese company (Company C), primarily providing supervision, management, and consultancy services. Company A and Company C agree that this arrangement has created a PE. How should the income Company A receives from Company C be taxed — should Company C withhold at source or should the PE self-file?

A: Because the arrangement has created a PE, the income attributable to the PE (i.e., the service fees Company C pays to Company A for those services) falls into the category of income of a non-resident enterprise attributable to its China establishment. Under Article 3(2) of the CIT Law, such income is not subject to withholding tax. Instead, the PE must self-declare and pay CIT on that income through the standard quarterly provisional return and annual reconciliation process. Company C should not withhold tax on payments to Company A in respect of those PE-linked services.

Q2: The PE (Company A’s establishment in China) cannot obtain a business registration certificate. How does it register for tax purposes in order to file its own CIT returns?

A: The absence of a business license does not prevent tax registration. Under SAT Order No. 19, Company A must register with the competent tax authority at the location of the project or service activity within 30 days of the contract being signed. The registration is based on contract documentation, not a business license. The authority will issue a tax identification number, which the PE uses for all subsequent provisional quarterly filings and the annual non-resident enterprise CIT reconciliation. In parallel, Company C (as the domestic outsourcing party) must file a separate report with its own competent tax authority within 30 days of contract signing.

Q3: The PE (Company A’s establishment in China) cannot obtain a business registration certificate. How does it register for tax purposes in order to file its own CIT returns?

Annual CIT filing checklist for non-resident enterprises 2026

Before submitting your non-resident enterprise annual CIT return in 2026, work through the following steps:

	Checklist Item	Key Actions
☐	Confirm PE or establishment status	Determine whether your China presence constitutes an establishment or PE; review the five PE indicators where seconded staff are involved
☐	Complete tax registration	Register with the tax authority if not already registered, following the SAT Announcement [2013] No. 19 procedures, where no business license is available
☐	Select the correct tax return form	Use the 2019 Edition Non‑Resident Enterprise Annual CIT Return, not the resident enterprise return
☐	Prepare financial documentation	Prepare annual financial statements or a written financial summary in Chinese
☐	Prepare the related‑party transactions report	Complete the report if transactions exist between the PE and the head office or other affiliated entities
☐	Prepare treaty benefits information report	Submit if claiming reduced CIT under a tax treaty and not already filed at the provisional stage
☐	Meet the annual filing deadline	File by May 31, 2026, either online via the Electronic Tax Bureau or in person at the tax service hall
☐	Respond to tax authority notices	Review any Notice of Reconciliation Matters and settle additional tax or apply for refunds within statutory time limits
☐	Retain supporting documentation	Keep all relevant documents (contracts, correspondence, financial records, PE analysis) for at least 10 years