How to Complete Your First Monthly Tax Filing in China: 2025 Guide

How to Complete Your First Monthly Tax Filing in China: 2025 Guide

Your first monthly tax filing in China can feel overwhelming — the electronic tax bureau interface is in Chinese, the forms reference regulations you have never seen, and the penalties for errors are significant. But the process follows a predictable structure that, once understood, becomes a routine part of your monthly compliance cycle. This guide walks you through every step of your first monthly filing, from gathering the data to submitting the returns, with specific guidance for the 2025 digital filing environment under Jinshui Phase IV.

What Taxes Are Due Monthly?

In China, the monthly tax filing cycle covers up to four separate taxes that must be filed by the 15th of the following month. Not every company files all four — your obligations depend on your taxpayer classification and business activities.

For your first monthly filing, focus on the taxes that apply to your situation. Most WFOEs and branches will file VAT (monthly for general taxpayers), the three surcharges, IIT withholding for employees, and stamp duty. The electronic tax bureau will display only the forms that apply to your registered tax obligations — you cannot accidentally file a form you are not registered for.

Step 1: Prepare Your Data Package

Before logging into the electronic tax bureau, gather the data you will need for each tax return. For VAT filing, this means organizing all fapiao (invoices) issued and received during the filing period:

• Output fapiao: A list of all special VAT fapiao and general fapiao you issued during the month, organized by rate (13%, 9%, 6%, or 1-3% for small-scale taxpayers). The total output VAT is calculated by applying the applicable rate to your taxable revenue for each category.
• Input fapiao: A list of all VAT-deductible fapiao you received from suppliers, including the invoice number, supplier’s taxpayer ID, date, amount (ex-VAT), and VAT amount. Only fapiao that have been verified through the tax bureau’s fapiao verification platform within the filing period are eligible for deduction.
• Customs VAT payment vouchers: If you imported goods during the month, the customs VAT payment receipt. Import VAT is deductible in the same manner as domestic input VAT, subject to the same timing rules.
• Bank statements: Your corporate bank account statements for the month, which the tax bureau may cross-reference against your declared revenue. Discrepancies between bank deposits and declared revenue are a common audit trigger.

For IIT withholding, you need employee salary data, social insurance and housing fund contribution amounts, and any deductions (additional deductions for children’s education, elderly care, housing rent, and continuing education — the “special additional deductions” available since 2019 and expanded in 2024).

Step 2: Log into the Electronic Tax Bureau

China’s Electronic Tax Bureau (Dianzi Shuiwuju) is accessed through either a web portal or a dedicated desktop application, depending on your province. The login process requires:

1. Digital certificate or account login. Most foreign companies use the digital certificate issued during tax registration, inserted via USB token or stored on the local computer. Alternatively, you can log in using the legal representative’s or tax agent’s personal account linked to the company’s USCC. As of 2025, biometric login (fingerprint) is available at 70% of provincial portals.
2. Enterprise selection. If you manage multiple entities, select the correct company from the dashboard. Each entity has its own tax profile and filing obligations — mixing them up can result in incorrect filings.
3. Navigating to the filing module. The main dashboard shows pending filings, deadlines, and any outstanding tasks. Click “Tax Filing and Payment” (Shuishou Shenbao ji Jiaona) to access your current-period filing forms.

First-time users should allow 30-45 minutes for the initial login session, as the interface may prompt you to install browser plugins, configure the fapiao software integration, or set up a security verification method. The system will display a tutorial video on first access — DO NOT skip it, as it contains the digital signature workflow that accounts for the most common first-filing errors.

Step 3: Complete the VAT Return (Form BGM002)

The VAT return is the centrepiece of your monthly filing. Form BGM002 (for general taxpayers) or the simplified Form BGM003 (for small-scale taxpayers) collects all your revenue and VAT data for the filing period. The form has multiple schedules:

Main table. This captures total revenue, taxable revenue, VAT-exempt revenue (if applicable), output VAT by rate, input VAT claimed, and net VAT payable. The system auto-calculates the net payable or refundable amount based on the data you enter in the sub-schedules.

Schedule 1: Revenue breakdown. You break down revenue by VAT rate and by revenue category (goods sales, service provision, construction, etc.). If you have revenue in multiple VAT categories, each must be reported separately. Errors here — reporting 13% goods revenue under 6% services — are the single most common VAT filing error for foreign companies in their first year.

Schedule 2: Input VAT deduction. You list all input fapiao being claimed for deduction in this filing period. The system will verify each fapiao against the tax bureau’s nationwide fapiao database — only verified, non-reversed fapiao from active suppliers are eligible. If a supplier’s fapiao is flagged as problematic, the system will prevent you from claiming the deduction and display an error code explaining why.

Schedule 3: VAT-exempt and reduced-rate activities. If you qualify for VAT exemption (certain financial services, educational services, technology transfer) or reduced rates, you must complete this schedule with the relevant regulatory citation.

After completing all schedules, review the summary table. The system calculates net VAT payable. If the result is a negative number (input VAT exceeds output VAT), the excess is carried forward to the next filing period for general taxpayers. For export-oriented enterprises, excess input VAT may be eligible for refund through the export VAT refund process.

Step 4: File Urban Maintenance and Construction Tax and Surcharges

These surcharges are calculated automatically based on your VAT payable amount. They are filed on a separate but linked form:

• Urban Maintenance and Construction Tax: 7% of VAT payable (in urban areas), 5% (in county towns), or 1% (in other areas). The rate depends on the registered location of your business premises.
• Education Surcharge: 3% of VAT payable, regardless of location.
• Local Education Surcharge: 2% of VAT payable, regardless of location.

The electronic tax bureau will pre-fill the surcharge amounts based on your VAT return data. You simply need to verify and confirm. If you filed a zero VAT return (no revenue and no VAT payable), the surcharges will also be zero. Note that these surcharges are not due if your VAT payable is zero — they are strictly proportional to VAT payable.

Step 5: File Individual Income Tax (IIT) Withholding

If you have employees (Chinese or foreign), you must withhold and remit IIT on their salaries. IIT withholding is filed separately from the VAT/surcharge filing, using the Natural Person Electronic Tax Bureau (Ziranren Dianzi Shuiwuju). The IIT filing includes:

• Employee registration data: Each employee’s name, passport/ID number, tax registration status, and declared special additional deductions.
• Monthly payroll data: Gross salary, social insurance (individual portion), housing fund (individual portion), special additional deductions, and calculated IIT liability using the cumulative withholding method.
• Foreign employee differentiation: Foreign employees can choose between the standard deduction (RMB 5,000 per month) plus special additional deductions, or a simplified deduction method that includes housing, education, and travel allowances. The choice, once made, applies for the entire tax year.

For foreign employees, the first IIT filing is particularly important because you must register each employee’s deduction preferences. The IIT system applies cumulative calculation — the tax in month 12 is based on year-to-date income, so early errors compound. A common pitfall is failing to claim the housing allowance exclusion for foreign employees, which can save RMB 15,000-40,000 per employee per year in IIT.

Step 6: File Stamp Duty

Stamp duty applies to specific types of contracts and documents executed during the filing period. The rates are:

Stamp duty filing has been simplified under Jinshui Phase IV — many enterprises can now file a consolidated monthly return listing all taxable documents by type, rather than filing per-document. The total stamp duty is usually a small amount for most service-oriented FIEs (RMB 500-2,000 per month), but failing to file it can trigger penalties disproportionate to the amount due.

Step 7: Final Review, Signature, and Payment

Before submitting, conduct a final review of all returns:

1. Verify that your declared revenue matches your bank deposits (within reasonable tolerance — the tax bureau allows for timing differences).
2. Confirm that the VAT rate applied to each revenue category is correct — 6% for services, 9% for construction/transport, 13% for goods — and that you haven’t miscategorised revenue.
3. Check that all input fapiao have passed verification. Any fapiao that failed verification should be excluded from this period’s claim and resubmitted next period after resolving with the supplier.
4. Confirm that IIT withholding amounts per employee are consistent with the cumulative method — the month-1 tax should be low, increasing as YTD income rises across the year.

After review, apply your digital signature. The electronic signature step is legally binding — it confirms that the returns are true and complete. Payment can be made immediately (via bank transfer from your registered corporate account, or by using the tax bureau’s online payment system linked to your bank) or scheduled for a later date within the 15th deadline. Late payment triggers an automatic daily surcharge of 0.05% of the unpaid amount, calculated from the 16th of the month.

Where to Go From Here

Your first monthly filing is the most time-intensive, but by month three you should be able to complete the full cycle in under two hours. The key to a smooth first filing is preparation — gathering your data package before logging into the electronic tax bureau, and understanding the structure of each form before you start filling it. If your internal capacity is limited, most outsourced accounting firms in China can manage the full monthly filing cycle for RMB 2,000-5,000 per month, including IIT withholding.

• Ready to act? Read a step-by-step guide to setting up your monthly tax compliance calendar in China
• Still comparing? See a side-by-side comparison of in-house vs outsourced tax filing options
• Need numbers? Try an interactive monthly tax compliance cost calculator for your entity

How to Complete Your First Monthly Tax Filing in China: 2025 Guide — first published on China Gateway 360. Last updated: July 2026.