Meaning
A mandatory administrative filing procedure requires domestic entities to report foreign exchange service payments exceeding statutory value thresholds to local tax authorities prior to bank remittance. Enterprises complete tax recordal outbound payments filings to obtain official electronic verification codes necessary for executing cross-border bank transfers. The requirement governs outbound payments exceeding fifty thousand United States dollars for trade in services, technology transfers, property income and return on investment distributions.
Statutory administration is handled jointly by local tax bureaus and commercial banks operating under State Taxation Administration and State Administration of Foreign Exchange guidelines. The requirement does not apply to trade in physical goods, routine logistics freight payments or transfers falling under statutory threshold amounts.
Filing Procedure
Filing occurs through the electronic tax bureau platform or directly at municipal tax service centers prior to currency settlement. Applicants submit transaction details, contract documents, tax withholding declarations and statutory invoice calculations to tax authorities. Local tax bureaus issue an electronic tax recordal filing form containing a unique registration number upon receiving completed documentation.
This registration number allows commercial banks to verify tax compliance online before clearing cross-border wire transfers.
Documentary Requirement
Submissions require executed contracts written in or translated into Chinese, tax calculation sheets and foreign exchange application forms. Intercompany charges require supporting economic rationale documents, including transfer pricing studies or board authorization resolutions. Software licensing and technology transfers require accompanying technology import registration certificates issued by commerce authorities.
Inaccurate contract translations or missing tax clearance receipts cause immediate filing rejection.
Remittance Clearance
Commercial banks verify tax recordal registration numbers directly against tax bureau databases before executing foreign exchange transfers. Completing the filing procedure does not exempt an enterprise from future tax audits regarding transaction transfer pricing or tax deductibility.
