Accounting Support in China

Accounting Support for Companies in China: Bookkeeping, Tax Filing, Fapiao and Compliance

Accounting in China is not only about recording income and expenses. For a foreign-invested company, WFOE, trading business, sourcing office, consulting company or import/export operation, accounting is part of legal compliance, tax management, invoice control, bank compliance, payroll, customs documentation and long-term business stability.

Many foreign entrepreneurs register a company in China and think the main work is finished when they receive the business licence. In reality, company registration is only the beginning. After registration, the company must maintain bookkeeping, tax filing, VAT and CIT reporting, fapiao management, payroll records, annual reporting, bank account maintenance and compliance with local regulations.

Myron Trade helps foreign entrepreneurs and companies understand accounting requirements in China and coordinate bookkeeping, tax filing, fapiao, payroll, import/export accounting and compliance support through qualified local accountants and service providers.

Who Needs Accounting Support in China?

Why Accounting in China Is Different from Many Other Countries

China has its own accounting, tax and invoicing system. Foreign business owners may be familiar with invoices, tax returns and bank statements in Europe, Africa or Latin America, but China uses a more formal invoice and tax control system. A commercial invoice alone is not always enough for local tax purposes. The official tax invoice system, commonly known as fapiao, is especially important.

Chinese accounting also requires proper vouchers, supporting documents, bank records, contracts, fapiao and tax filings. If documents are missing or inconsistent, the accountant may not be able to record expenses correctly or support tax deductions.

Accounting in China is connected with:

• business licence and business scope;
• tax registration;
• VAT taxpayer status;
• fapiao issuance and collection;
• corporate income tax;
• individual income tax for employees;
• payroll and social insurance;
• bank account records;
• foreign exchange controls;
• import/export documents;
• annual reporting and compliance.

Core Accounting Tasks for a Chinese Company

A properly managed company in China should have a regular accounting process. This process should not happen only once a year. It usually requires monthly or quarterly attention depending on the taxpayer status, business activity and local requirements.

What Is Fapiao and Why Is It Important?

Fapiao is an official tax invoice in China. It is not simply a receipt or a normal commercial invoice. It is part of the Chinese tax system and is important for clients, suppliers, accounting records and tax deductions.

If your Chinese company sells services or goods to another company in China, the client may request fapiao. If your company wants to record an expense properly, it may need to collect valid fapiao from suppliers. Without fapiao, some expenses may be difficult to deduct for tax purposes.

Fapiao is important for:

• recognising revenue;
• claiming deductible expenses;
• VAT reporting;
• client payments;
• supplier cost verification;
• audit and tax review;
• contract performance;
• bank and tax compliance.

VAT in China: What Companies Should Understand

VAT is one of the most important taxes for companies in China. It can apply to goods, services, imports, sales and certain cross-border transactions. The applicable VAT rate depends on the type of goods or services and the taxpayer status.

VAT management may include:

• checking whether the company is a small-scale taxpayer or general VAT taxpayer;
• confirming output VAT on sales;
• collecting input VAT fapiao from suppliers;
• filing VAT returns;
• checking VAT treatment for services;
• recording import VAT;
• checking export VAT refund possibilities where applicable;
• reconciling fapiao with accounting records;
• keeping supporting documents for tax review.

Small-Scale Taxpayer vs General VAT Taxpayer

Chinese companies may be treated differently depending on their VAT taxpayer status. This affects VAT filing, fapiao issuance, input VAT deduction and the way the company works with clients and suppliers.

Corporate Income Tax in China

Corporate income tax is calculated on taxable profit. Companies usually need regular provisional filings and annual reconciliation after the end of the tax year. The accountant must record revenue, deductible expenses, cost of goods, payroll, depreciation, service fees and other business items correctly.

CIT management includes:

• recording revenue correctly;
• checking deductible expenses;
• collecting valid supporting documents;
• calculating taxable profit;
• filing provisional tax returns;
• preparing annual CIT reconciliation;
• reviewing related-party transactions where relevant;
• keeping financial records for possible tax review.

Payroll, Individual Income Tax and Social Insurance

If a company hires employees in China, accounting becomes more complex. The company must calculate salaries, withhold individual income tax, manage social insurance, housing fund where applicable, and maintain employment records.

Payroll support may include:

• salary calculation;
• individual income tax withholding;
• social insurance contribution calculation;
• housing fund calculation where applicable;
• employment contract coordination;
• payslip preparation;
• payroll bank transfer support;
• employee onboarding and offboarding records;
• annual IIT reconciliation support where applicable.

Accounting for Import and Export Companies

Trading and import/export companies need accounting that connects business transactions with customs documents, logistics, supplier payments, fapiao, VAT, foreign exchange and possible export tax refund logic.

This is especially important for companies that buy goods in China and sell them abroad, import goods into China, consolidate cargo, work with customs brokers or handle cross-border payments.

Import/export accounting may include:

• supplier invoices and contracts;
• commercial invoices;
• packing lists;
• customs declarations;
• Bill of Lading, CMR, Air Waybill or rail documents;
• freight and insurance costs;
• import duties and import VAT;
• export VAT refund documentation where applicable;
• foreign currency payments;
• bank settlement documents;
• warehouse and logistics expenses;
• profit calculation by shipment or project.

Bank Compliance and Foreign Exchange

Bank account management in China can require supporting documents. For incoming and outgoing payments, banks may ask for contracts, invoices, customs documents, service agreements or explanations of the transaction. This is especially common for foreign currency payments and cross-border business.

Bank compliance may require:

• business contracts;
• commercial invoices;
• fapiao where relevant;
• customs documents;
• proof of service delivery;
• payment purpose explanation;
• beneficiary and payer details;
• foreign exchange registration documents;
• tax filing consistency;
• company chop and authorised signature documents.

Monthly Accounting Workflow for a China Company

A good accounting process should follow a monthly workflow. This helps prevent missing documents, late filings and year-end confusion.

Annual Compliance for Chinese Companies

In addition to monthly or quarterly accounting, Chinese companies need annual compliance work. This may include annual corporate income tax reconciliation, annual reporting, financial statements, audit-related work where applicable and updates to company information.

Annual compliance may include:

• annual financial statement preparation;
• corporate income tax reconciliation;
• annual reporting to market regulation authority;
• foreign investment information reporting where applicable;
• related-party transaction reporting where relevant;
• audit report where required;
• review of tax risks and missing documents;
• profit distribution and dividend planning;
• licence and registration data review;
• bank and foreign exchange compliance check.

Accounting for Inactive Companies

Some foreign investors register a company in China and do not start business immediately. This does not mean accounting can be ignored. An inactive company may still need tax filings, annual reporting and accounting records showing no activity.

Inactive companies should still check:

• whether monthly or quarterly tax filings are required;
• whether zero declarations must be submitted;
• whether bank account records must be maintained;
• whether annual reporting is required;
• whether the registered address is still valid;
• whether the company needs to maintain accounting vouchers;
• whether licence or business scope updates are needed;
• whether closure or deregistration should be considered if the company is not used.

Accounting Support for European Companies in China

European companies in China often need accounting that connects Chinese compliance with headquarters reporting. A company from Poland, Germany, the Netherlands, Czech Republic, the Baltic countries or the Balkans may need local Chinese books while also reporting financial data to the parent company abroad.

European clients often need:

• Chinese bookkeeping;
• monthly management reports in English;
• VAT and fapiao management;
• payroll and staff cost reporting;
• cost centre or project-based accounting;
• import/export transaction support;
• dividend and profit repatriation planning;
• coordination between Chinese accountant and overseas accountant;
• bank and foreign exchange document support.

Accounting Support for African and Latin American Companies

African and Latin American businesses often use China companies for procurement, supplier management, trading, warehouse consolidation and export operations. Their accounting should be connected with supplier payments, shipment documents, logistics costs and client invoicing abroad.

These companies often need:

• supplier payment records;
• purchase contracts and invoices;
• warehouse and consolidation cost records;
• export document support;
• profit calculation by shipment;
• bank document support for cross-border payments;
• VAT and fapiao management;
• accounting reports for head office;
• cost control for procurement operations.

Common Accounting Mistakes in China

How Myron Trade Helps with Accounting Support in China

Myron Trade helps foreign clients coordinate accounting and compliance support in China through qualified local accountants, tax specialists and service providers. We help translate business needs into practical accounting tasks and connect accounting with sourcing, export, import, logistics, bank documentation and business operations.

Example: European WFOE Providing Sourcing Services

A European entrepreneur registers a WFOE in China to provide sourcing and supplier management services. The company receives service fees from overseas clients, pays local suppliers, hires a part-time assistant and sometimes issues fapiao to Chinese partners.

The company needs monthly bookkeeping, VAT filing, CIT prepayment, payroll records, bank document support and annual compliance. Myron Trade helps coordinate with local accountants and explains which business documents should be kept for accounting and tax purposes.

Example: Latin American Trading Company Buying Goods in China

A Latin American company uses its China structure to purchase goods from several suppliers, consolidate cargo and export shipments. The accounting must connect supplier invoices, warehouse fees, logistics costs, bank payments, customs documents and client invoices.

Without structured accounting, it becomes difficult to understand profit per shipment. With proper records, the company can see real margins, supplier costs, logistics costs and tax obligations more clearly.

Example: Foreign Brand Importing Goods into China

A foreign brand sells products into China through its local company. The company needs to record import documents, customs duties, import VAT, warehouse costs, distributor payments, fapiao, sales revenue and marketing expenses.

In this case, accounting support should be connected with import compliance, customs documents, Chinese labels, local sales channels and inventory movement.

China Accounting Checklist

What Information Should You Send for Accounting Support?

To organise accounting support properly, we need to understand your company structure and business activity in China.

• Chinese company name if already registered;
• city of registration;
• business licence copy;
• business scope;
• tax registration status;
• whether the company has bank account;
• whether fapiao system is active;
• monthly number of transactions;
• whether the company has employees;
• whether the company imports or exports goods;
• whether the company receives overseas payments;
• whether the company pays Chinese suppliers;
• whether bookkeeping has already started;
• whether there are missed filings or old accounting problems;
• whether English reporting is needed for the foreign owner or head office.

FAQ: Accounting Support in China

This material was prepared by Myron Trade for European, African, Latin American and international entrepreneurs and companies that need accounting coordination, bookkeeping, tax filing, fapiao, payroll, annual compliance and import/export accounting support in China. This article is for general information and should not be treated as legal, tax or accounting advice.