Recently, the State Administration of Taxation (SAT) released a public notice, Public Notice Regarding Certain Matters on Corporate Income Tax (CIT) Policy Risks Alert Service (the SAT Public Notice  No.10, Public Notice 10), which sets forth that tax resident enterprises (TREs) who file CIT on an actual basis can voluntarily choose the CIT policy risks alert service (the Service) to perform online risk scanning while filing their annual CIT returns (the returns) electronically, and address the tax risks identified accordingly. Public Notice 10 took effect from 18 April 2017 and applies to the on-going 2016 annual CIT filing. Subsequently, the SAT further introduces the background and details of the Service through the release of the official interpretation of Public Notice 10, the Notice Regarding the Policy on Provision of CIT Risks Alert Service to Taxpayers (Shuizonghan  No.135, Circular 135) and an online interview. Certain provincial-level tax authorities have also issued their own user manual to clarify the implementation details.
The Service alerts taxpayers of the potential tax risks identified on the scanning before the completion of the filing of the annual CIT, which will help them improve the quality of their reported data and reduce potential tax risks. Moreover, in addition to providing innovative tax service, the launch of the Service also discloses the tax authority’s trend of taking full advantage of big data to support tax collection and administration, which will definitely bring significant impact to taxpayers.