Issued by an Accounting Firm for Income Tax Review

Issued by an Accounting Firm for Income Tax Review

An income tax review is not mandatory. The specific analysis is as follows:

Nature and Requirements of Tax Review

A tax review, that is, annual income tax reconciliation, is a service in which a tax agent firm examines an enterprise’s accounting treatment and tax payment situation, and corrects and adjusts the amount declared for tax payment. It is not work that all enterprises must carry out every year, but is determined according to the enterprise’s specific needs and the requirements of the tax authorities.

Legal Basis

According to the Law of the People’s Republic of China on the Administration of Tax Collection, taxpayers must, in accordance with the declaration period and declaration content determined by law, truthfully handle tax declarations and submit tax declaration forms, financial accounting statements, and other tax-related materials. There is no mandatory requirement here that enterprises must prepare a tax review report.

Applicable Situations for Tax Review Reports

A tax review report is mainly required to be issued in the following situations: at year-end, state-owned enterprises with supervising departments need to issue audit reports to the supervising departments; when an enterprise is restructured, issuance is required according to documents or legal provisions; when the tax bureau suspects that the enterprise’s accounts are inaccurate or that its tax burden is too low, it requires issuance; when leaders are promoted, resign, or are transferred, it is generally necessary to issue audit reports for recent years. In addition, in situations such as abnormal scrapping and loss of property, or enterprise deregistration and liquidation, a tax review report may also need to be issued by a tax agent.

In summary, an income tax review is not work that an enterprise must carry out every year, but is determined according to the enterprise’s actual circumstances and the requirements of the tax authorities. If the enterprise does not have the above situations requiring issuance of a tax review report, it may choose not to conduct a tax review.