Notice on Investigating the Sources of CIT

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May 27 – The State Administration of Taxation and the Ministry of Finance jointly issued a notice recently regarding the 2010 investigation on sources of CIT.

Caishui [2010] No. 28, issued on May 5, stipulates the scope, content, time line and requirements of the investigation. Compared to the 2009 version, the updated notice includes the nation-wide investigation of key sources of CIT.

Principles of chosen enterprises for investigation are listed below:

  • At least 10 enterprises and at least three industries will be investigated in each province (autonomous regions and municipalities)
  • Regional economic characteristics should be reflected in the investigation
  • Large-scale enterprises with strong correlation with the national economics are to be selected
  • The previous year’s top taxpayers in each province, autonomous region, and municipality will be selected
  • Instead of investigating the listed companies, the groups which hold the listed companies are to be investigated

The content of the investigation includes the corporate quarterly financial report, enterprise quarterly CIT fillings and other business-related accounting items. Each region should complete the process of the selection of enterprises and report to the taxation department of Ministry of Finance no later than May 31. The investigation of key CIT sources began from the first quarter of 2010, and each provincial finance department should report to the Ministry of Finance within 30 days from the date of quarter end.