What are the consequences for late payment of income tax by a foreign-invested enterprise ("FIE")?
Under the Law of the PRC for the Administration of the Levy and Collection of Taxes (the "Tax Collection Law") which was amended in February 1995, and the Measures for the Administration of Tax Registration effective from July 1, 1998, an FIE should register with the local tax authorities within 30 days of receiving its business license. An FIE should be prepaying income tax on a quarterly basis within 15 days of the end of each quarter, and settled the actual income tax amount within five months after the end of the tax year. A late payment fine of 0.2 percent of the outstanding amount per day may be slapped on the FIE in addition to the back taxes owed. The clock will start ticking for the fine from the day the taxes were due.
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