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Taxation Services

Negotiation of Tax Penalties

Foreign investors often make faulty assumptions regarding tax matters in China. They believe that China’s tax laws are straightforward and that no expert help is needed. However, there are various complex rules covering numerous aspects of a Foreign Invested Enterprise’s business activities in China. Thousands of tax rulings have been issued by the State Administration of Taxation (SAT). Although there are still loopholes in the system, foreign investors unaware of tax planning methods may face serious penalties or losses due to paying over the odds and thus require services to negotiate tax penalties.

LehmanBrown can support you if required to effectively negotiate with the relevant authorities in order to minimize the impact on your business.

Tax Penalties & Punishment 

Foreign and local investors in China are required to declare, properly and clearly, all income earned in Mainland China. Some investors, in order to increase their personal wealth, hide revenues and create fraudulent invoices, purchasing receipts and transportation invoices.

How can LehmanBrown support with the Negotiation of Tax Penalties?

At LehmanBrown we offer access to tax specialists who have extensive experience in dealing with China’s tax officials to help you prepare for a tax audit and to handle queries from tax officials. In doing so, you will be able to identify tax risk areas and amend them prior to a tax audit. In case of fraud, here some penalties that your company or yourself could receive:

  •  Tax Penalties could reach up to 5 times the unpaid tax
    •    If a company is penalised for fraudulent invoices or receipts, the penalties incurred could range from RMB 10 000 – 50 000 for small cases and up to RMB 50 000 – 500 000 for more serious cases.
    •    In several cases of tax evasion, jail sentences have been imposed.
    •    In the most serious cases of massive fraud, corruption & tax evasion, the death penalty could be applied.

To make an enquiry, please contact us at enquiries@lehmanbrown.com or for information about the Negotiation of Tax Penalties Service that LehmanBrown offer in China, please see the relevant pages on our website.

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