The tax clearance process prior to deregistration is an important legal and financial process that ensures that all tax matters have been properly taken care of before the business terminates operations. The following are the steps that are usually followed before deregistering a company:
According to Article 35 of the Law of the People's Republic of China on the Administration of Tax Collection and Collection, the Enterprise Income Tax Law and other relevant provisions, an enterprise shall liquidate the outstanding taxes and fees in accordance with the law before deregistration.
1.Tax write-off application
According to the requirements of the "National Tax Service Specification for Tax Authorities", enterprises are required to submit a written application for cancellation of tax registration to the in-charge tax authority, together with relevant materials.
2.Liquidation audit and filing
Entrust an accounting firm to conduct a liquidation audit and prepare a liquidation report.
According to the audit results, sort out and declare all outstanding taxes and fees, including but not limited to VAT, corporate income tax, stamp duty, real estate tax, etc.
3.Pay off tax arrears and late fees
In accordance with the amount of tax payable and late payment penalty approved by the tax authorities, all tax arrears and late payment fines shall be paid in a timely manner.
4.Tax checks
After receiving the deregistration application of the enterprise, the tax authority will conduct a tax inspection on the enterprise to confirm that there is no omission or underpayment of tax.
5.Tax write-off approval
After confirming that the enterprise has fulfilled all tax obligations, the tax authorities will issue a Notice of Tax Matters to approve the tax cancellation of the enterprise.
6.Industrial and commercial cancellation and other follow-up procedures
After obtaining the tax cancellation certificate, the enterprise can go through the relevant follow-up procedures such as industrial and commercial cancellation.
1.Prepare in advance
Before planning to deregister a company, you should communicate with your tax advisor or lawyer in a timely manner to understand the specific steps and time required for tax clearance to ensure that you have enough time to deal with tax matters.
2.Handling of special circumstances
If the enterprise has special circumstances such as tax incentives, tax refunds, deductions, etc., it should be properly handled before cancellation to avoid the loss of rights that cannot be enjoyed or reclaimed due to cancellation.
3.Tax exception handling
If an enterprise has tax violations or the tax audit has not yet been completed, these abnormal problems should be resolved before the normal deregistration and tax clearance process can be carried out.
4.Save the credentials
All documents, statements, audit reports and relevant documents issued by the tax authorities generated during the tax clearance process should be properly kept so that they can be used as evidence in subsequent disputes.
5.Legal Liability
If an enterprise fails to settle its taxes in accordance with the law before deregistration, its legal representative and other directly responsible persons may face corresponding legal liabilities, including administrative penalties and even criminal liabilities (such as suspected tax evasion).
In short, enterprises must pay attention to tax clearance before deregistration, strictly follow the requirements of China's laws and regulations, and ensure that the entire deregistration process is legal and compliant, so as to protect the rights and interests of enterprises and relevant personnel to the greatest extent. In this process, it is very necessary to hire a legal professional to provide advice and services.
Tax clearance procedures prior to deregistration of the company