Accounting & tax · Mainland China companies
A company in Shanghai.
What has to be filed, and when?
A foreign-owned company (WFOE) in Shanghai files tax returns every month or quarter, settles its corporate income tax once a year, reports to the market regulator, and runs payroll tax and social insurance for its staff. Here is the calendar, with the legal deadlines behind it.
01 · The yearly calendar
Eight recurring obligations
These apply to an ordinary WFOE or other limited company in Shanghai once it is registered for tax and has staff. Tax deadlines move around public holidays; the tax bureau publishes the exact dates each year.
| Obligation | When | What it involves |
|---|---|---|
| VAT and surcharges | Monthly or quarterly, within 15 days after the period ends | General taxpayers usually file monthly; small-scale taxpayers (annual taxable sales up to RMB 5 million) usually quarterly. Standard rates are 13%, 9% and 6%; the simplified levy rate is 3%. Local surcharges are filed with the VAT return. [1] |
| Individual income tax withholding | Monthly, by the 15th of the following month | The company withholds tax from salaries, including those of foreign staff and paid directors, and files a withholding return covering everyone it paid. [2] |
| Social insurance and housing fund | Monthly | Contributions for each employee, foreign staff included. Shanghai resets the contribution base every 1 July. [3] [4] |
| Corporate income tax prepayment | Within 15 days after each quarter (or month) | A provisional return and payment based on profits for the year so far. [5] |
| Corporate income tax annual settlement | By 31 May, for the previous calendar year | The annual return settles the year’s tax: pay any balance or claim back an overpayment. Related-party transaction forms are filed with it. [5] |
| Annual audit | Before the annual tax return | A Chinese accounting firm audits the previous year’s financial statements. See section 03 on when it is needed. |
| Annual report to the market regulator | 1 January to 30 June | Filed online through the National Enterprise Credit Information Publicity System. For a foreign-invested company, the same report also covers the foreign investment information report and the foreign exchange stock-equity registration. [6] [7] [8] |
| Employees’ annual tax reconciliation | 1 March to 30 June | Each employee reconciles the previous year’s salary income and either pays the difference or claims a refund. The company supplies income records and often helps staff file. [2] |
02 · Every month
Monthly and quarterly filings
Most of the work happens in the first half of each month. The accountant closes the previous month’s books, then files VAT, withholding tax and, after each quarter, the corporate income tax prepayment by the 15th.
- File even with no revenue. A company with no sales still submits zero returns for each period. A late or missing return can be fined up to RMB 2,000, or RMB 2,000 to 10,000 in serious cases, and tax paid late carries a surcharge of 0.05% per day. [9]
- Fapiao drive the numbers. VAT is calculated from the fapiao (official invoices) the company issues and receives, so issued fapiao, receipts and bank movements need to match every month.
- Records the accountant needs: bank statements for every account, fapiao issued and received, contracts, payroll and expense claims. Payments that cannot be matched to documents become questions at the audit.
03 · Annual settlement and audit
Corporate income tax and the audit
- Standard rate: 25% of taxable income. Losses can generally be carried forward for up to five years. [5]
- Small low-profit enterprises: a company in a non-restricted industry with annual taxable income of no more than RMB 3 million, no more than 300 employees and total assets of no more than RMB 50 million pays tax at 20% on 25% of its taxable income, an effective 5%. The relief currently runs to 31 December 2027, and qualification is confirmed at the annual settlement. [10]
- Settle by 31 May. The annual return reconciles the quarterly prepayments with the full-year result, so the year-end books should be closed and audited first.
Is an audit compulsory? The Company Law requires annual financial reports to be audited by an accounting firm where the law calls for it. In practice most WFOEs commission an audit every year, for two concrete reasons:
- Paying profits abroad. Before remitting more than USD 50,000 in profits, the bank reviews the profit distribution resolution, the tax filing record and audited financial statements. Earlier years’ losses must be made up first. [11]
- A single shareholder. Many WFOEs have a single investor. If the company has only one shareholder and that shareholder cannot prove the company’s assets are independent of its own, it is jointly liable for the company’s debts. Audited accounts are the most practical evidence. [12]
04 · The annual report
Reporting to the market regulator
Between 1 January and 30 June, every company files an annual report for the previous year through the National Enterprise Credit Information Publicity System. It covers company details, investors, and operating and balance sheet figures, and much of it is publicly visible. A company registered during a year starts reporting the following year. [6]
For a foreign-invested company this is a combined report. The same filing serves as the annual foreign investment information report to the commerce authorities, and the data is passed to the State Administration of Foreign Exchange as the company’s direct investment stock-equity registration. [7] [8]
A company that misses the deadline is placed on the regulator’s list of enterprises with abnormal operations, which banks and business partners check. The figures should match the audited accounts and the annual tax return, so in practice the report is filed after the 31 May tax settlement.
05 · Payroll
Individual income tax and social insurance
- Monthly withholding: tax withheld from salaries is paid and reported by the 15th of the following month. [2]
- Foreign staff allowances: a foreign employee who is tax resident in China chooses either the standard special deductions or the tax exemption for housing, language training and children’s education allowances, not both, and keeps that choice for the tax year. This arrangement runs to 31 December 2027. [13]
- Annual reconciliation: employees who need to reconcile their salary income do so between 1 March and 30 June of the following year. [2]
- Social insurance for foreigners: foreign nationals employed by a company registered in China join pension, medical, work injury, unemployment and maternity insurance, with contributions shared between the company and the employee. Citizens of countries with a social security agreement with China follow that agreement. [3]
- Shanghai contribution base: from 1 July 2026, the monthly base for each employee is set between RMB 7,546 and RMB 37,731. The range is reset every July, with any back payment due by the end of September. [4]
06 · Group structure
If your WFOE is owned by a Hong Kong company
Many WFOEs are held through a Hong Kong company, which has its own, separate calendar: an annual return, business registration renewal, an audit and a profits tax return. See Hong Kong company annual compliance. If the Hong Kong company also holds an NRA or FTN account in mainland China, the bank will expect both companies’ records to be in order.
Still planning the mainland company? Start with our WFOE registration guide. For ongoing bookkeeping and filings, see accounting and tax services in Shanghai.
07 · Questions
Common questions
Our company has no revenue yet. Do we still file?
Yes. A company files its VAT, withholding and corporate income tax returns for every period even when the figures are zero, and submits the annual report. A missed return can lead to a fine and lowers the company’s tax credit rating.
When does a new company file its first annual report?
A company registered during the year starts annual reporting the following year. A company set up in 2026 files its first report, covering 2026, between 1 January and 30 June 2027.
Is an annual audit compulsory for a WFOE?
The Company Law requires an audit where the law calls for it, and in practice most WFOEs commission one every year. Banks review audited financial statements before remitting more than USD 50,000 in profits abroad, and a company with a single shareholder relies on its accounts to show that the company’s assets are separate from the shareholder’s.
Do foreign employees pay social insurance in Shanghai?
Generally yes. Foreign nationals employed by a company registered in China join the same five social insurance schemes as local staff, with contributions shared by the company and the employee. Citizens of countries that have a social security agreement with China follow the terms of that agreement.
What happens if a deadline falls on a public holiday?
Tax deadlines are extended when they fall on a public holiday and around long holidays such as Chinese New Year and National Day. The tax bureau publishes the filing calendar for each year.
Sources and scope
- Value-Added Tax Law, effective 1 January 2026 — articles 9 to 11 and 30; Shanghai Tax Service (Chinese).
- Individual Income Tax Law (amended 2018) — articles 11 and 14; State Taxation Administration (Chinese).
- Interim Measures for Social Insurance of Foreigners Employed in China — Shanghai Human Resources and Social Security Bureau (Chinese).
- Shanghai 2026 social insurance contribution base limits — Shanghai Human Resources and Social Security Bureau, 18 August 2026 (Chinese).
- Enterprise Income Tax Law (amended 2018) — articles 4, 18 and 54; Shanghai Tax Service (Chinese).
- Interim Regulations on Enterprise Information Disclosure (revised 2024) — article 8; Ministry of Justice database of administrative regulations (Chinese).
- Measures for Reporting Foreign Investment Information — Ministry of Commerce and State Administration for Market Regulation (Chinese).
- 2025 direct investment stock-equity registration guide — State Administration of Foreign Exchange, Beijing branch (Chinese).
- Tax Collection Administration Law — articles 32 and 62; State Taxation Administration (Chinese).
- Ministry of Finance and State Taxation Administration Announcement No. 12 of 2023 on small and micro enterprises — Chinese government website (Chinese).
- SAFE Notice Huifa [2017] No. 3 on authenticity and compliance reviews — article 7 on profit remittance; State Administration of Foreign Exchange (Chinese).
- Company Law of the People’s Republic of China (revised 2023, effective 1 July 2024) — articles 23 and 208; National People’s Congress (Chinese).
- Ministry of Finance and State Taxation Administration Announcement No. 29 of 2023 on foreign individuals’ allowances — Chinese government website (Chinese).
General information only, checked against the sources above on 18 October 2026. Rates, reliefs and deadlines change, and the filing period for each tax is confirmed by the company’s tax office. Confirm your company’s position with your accountant or the relevant authority.