Optimized tax procedures for cross-provincial relocations in China

published on 24 August 2023 | reading time approx. 3 minutes

Similar to other countries, it is common for companies in China to consider relocating between provinces for operational and administrative reasons.

Our experience so far shows that such a move between provinces can be a time-consuming, compliance-burdened procedure, that requires communication and coordination with multiple governmental authorities. The amendment of tax registration thereof usually takes the longest time and may encounter numerous procedural obstacles, especially in the transfer-out of tax registration.

In April 2023, the procedures of tax registration amendment has been simplified, and the tax service processes for cross-provincial relocation has also been substantially optimized. We hereby set out the processes of cross-provincial tax registration transfer-out as follows:

Change the registered office with the market regulator: Companies should first change the registered office with the relevant market regulator.
Submission of the "Notification Form for Tax Matters in the Event of Inter-Provincial Relocation": Subsequently, completion and submission of this notification form to the original tax authority is required.
Completion of the following matters with the original tax authority: This includes the completion of the tax audit, deregistration of fapiaos and tax control devices, settlement of outstanding taxes, late fees, fines and other outstanding tax matters such as extraordinary fapiaos.
Preparation of the "Confirmation Form for Tax Matters in Inter-Provincial Relocation": The original tax authority issues the form which, once confirmed by the company, forms the basis for the seamless relocation.

From the procedures above, it can be noted that as long as the tax collection and administration system indicates that the enterprise taxpayer is not under tax inspection or has any outstanding tax-related matters such as extraordinary Fapiaos, when the taxpayer completes the amendment of registered domicile with market regulation authority, there are only reporting form submission and normal formalities remaining for the tax registration amendment. No other inspection or verification procedures by the original tax authority is required anymore, which would greatly reduce the previous procedural hindrances in the tax registration amendment process.

It is noteworthy that the tax administration system will play an important role in the new processes. We recommend enterprise taxpayers should pay close attention to their tax compliance work during the daily operation activities, especially their corporate records and status in the tax collection and administration system. Once the system delivers any notices regarding tax inspection or extraordinary tax-related matters, taxpayers should seek for the solution timely and proactively, so that they do not have to encounter the unnecessary procedural hindrances, which would increase the compliance burden, time, and labor costs to the enterprise, when important operational decisions such as cross-provincial relocation are made.