On August 14–15, 2026, Zhang Hui, Director of the Beijing 12366 Office of the State Taxation Administration, clarified two points in a public statement: the consolidation of social insurance contribution bases will be implemented in phases, will not be applied retroactively, and will not involve a集中清缴; In 2026, social security compliance requirements will be focused on large and medium-sized enterprises with the capacity to make contributions, while small and micro enterprises will not be included for the time being. This news has provided temporary relief to many small and micro enterprise owners; however, behind this seemingly moderate policy statement, the integration of social security data with individual income tax and corporate income tax data has already quietly taken shape within the framework of the Golden Tax Phase IV initiative.

For large and medium-sized enterprises, “not retroactively reviewing past records” does not mean “no oversight.” The State Taxation Administration’s statement is very clear: a phased approach means that this year, companies with the ability to pay will be the first to be brought into compliance, with the consistency of employee headcount, contribution bases, and reported wages becoming the focus of verification. Once a company is flagged as abnormal by the system, cross-departmental data comparisons will quickly pinpoint areas of concern, and back payments, late payment penalties, and even fines will still follow.

When viewed within the broader context of “data-driven taxation” under the Golden Tax Phase IV initiative, companies should focus not on whether “historical records will be audited,” but rather on whether “current data can withstand verification.” Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the U.S., Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as annual review and auditing, bookkeeping and tax filing, tax compliance, information updates, bank account openings, ODI filings, FDI filings, and other corporate services; Hong Kong residency applications, renewals, and permanent residency services; Singapore EP application services; and cross-border e-commerce support and agency operations. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

I. “Not Looking Back at Past Issues” ≠ “No Oversight”: Three Key Signals to Understand

Director Zhang Hui’s response has been simplified by many self-media outlets as “social security audits will no longer be conducted.” However, her full statement consists of three levels, which companies must understand accurately.

First, proceed in stages, do not apply the measures retroactively, and do not conduct a centralized collection drive. This means that the tax authorities will not conduct large-scale retroactive audits and collection efforts on historical contribution bases, as they did during the initial phase of the social security integration into the tax system in 2019. However, the “phased implementation” approach itself sends a strong signal regarding the direction of policy—compliance with social security regulations is inevitable, and it will simply be implemented in stages.

Second, the 2026 scope will be limited to large and medium-sized enterprises with the ability to make contributions. Large and medium-sized enterprises, which have a large number of employees, complex wage structures, and are more likely to have previously reported contributions based on the minimum contribution base, will be prioritized for compliance review. The criteria for determination include indicators such as the number of insured employees, operating revenue, and asset size. In other words, enterprises that have the financial capacity to make contributions but have long reported them based on the minimum contribution base will be subject to heightened scrutiny.

Third, small and micro-enterprises have not yet been included. Micro and small enterprises have benefited from the statement that “past violations will not be retroactively investigated,” but this does not mean they can continue to handle social insurance in a non-compliant manner. First, the “exclusion” is a temporary measure that may be adjusted at any time in the future; second, the data integration under the Golden Tax Phase IV system does not distinguish between enterprises of different sizes, and discrepancies in the number of social insurance enrollees, contribution bases, or individual income tax filers will be detected by the system regardless of the enterprise’s scale.

II. Data Integration under the Fourth Phase of the Golden Tax System: “Triangular Verification” of Social Security, Individual Income Tax, and Corporate Income Tax”

Social security compliance has never been an isolated issue. Under the framework of the Fourth Phase of the Golden Tax Project, social security, individual income tax, and corporate income tax have formed a “triangular verification” relationship.

First, a comparison between the number of social security enrollees and the number of employees who file individual income tax returns. An upgrade to the individual income tax withholding declaration system now triggers a pop-up verification alert for “zero declarations for three consecutive months.” The system automatically compares the number of employees enrolled in social insurance with the number of employees reported in individual income tax declarations; companies with discrepancies between these two sets of data will be flagged as abnormal. Common practices such as “paying wages but not contributing to social insurance” and “contributing to social insurance but not reporting wages” will be directly flagged by the system.

Second, a comparison of the social insurance contribution base and the taxable income for individual income tax purposes. If social insurance contributions are based on the minimum contribution base while individual income tax is reported based on actual wages, this can create a discrepancy between the company’s cost data and employees’ income data; conversely, if social insurance contributions are based on actual wages while individual income tax is reported based on the minimum standard, this would reveal that the company is maintaining two sets of payroll data. In either case, this provides a point of entry for tax audits.

Third, a comparison of social insurance data with wages and salaries deductible for corporate income tax purposes. Wage and salary expenses are a key item eligible for pre-tax deduction in corporate income tax, and social insurance data serves as crucial evidence for verifying the authenticity of wages. If there is a significant discrepancy among the total wages reported for corporate income tax, the total wages reported for individual income tax, and the social insurance contribution base, the company faces the risk of having to pay back taxes, late payment penalties, or even being deemed to have filed a fraudulent tax return.

To address social insurance compliance needs, Qicaiying offers a comprehensive service package that combines “bookkeeping and tax filing, tax compliance, and social insurance consulting”: We help companies verify the consistency of the number of employees covered by social insurance, contribution bases, and the number of employees subject to individual income tax filing; standardize salary structures, allowances and subsidies, and the proper categorization of reimbursement vouchers; It also offers social insurance contribution base adjustment plans, guidance on annual filings, and tools for cross-departmental data reconciliation. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as corporate annual review and audit, bookkeeping and tax filing, tax compliance, information updates, bank account opening, ODI and FDI filings, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore Employment Pass (EP) application services; cross-border e-commerce support and agency operations—all as part of our one-stop service. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

III. Three Key Compliance Measures for Large and Medium-Sized Enterprises: Data Self-Audits, Structural Adjustments, and Documenting Evidence

Large and medium-sized enterprises designated as priorities for 2026 should immediately take action in the following three areas.

First, conduct a self-inspection of social security data. Retrieve data on the number of social insurance enrollees, contribution bases, and reported wages for the past 12 months, and compare them month by month with the number of individual income tax filers and their reported wages; identify discrepancies such as mismatched numbers, abnormally low contribution bases, and unusual reported wages, and compile a list of corrective actions. Focus on three categories of employees: mid- to senior-level managers who have long been reported at the minimum contribution base, new hires, and temporary agency workers.

Second, adjust the structure of wages and social security. For mid- to senior-level managers, key technical staff, and core sales positions, adjust the social insurance contribution base according to actual compensation levels; reasonably structure the salary composition for certain positions by categorizing and listing base pay, performance bonuses, and subsidies/allowances separately to ensure data consistency across personal income tax filings, social insurance contributions, and corporate income tax deductions. At the same time, conduct a special review of withholding agents with a long history of zero tax returns to prevent triggering system blocks.

Third, standardize payroll processing and ensure that records are properly maintained. All salary payments must be made through corporate bank accounts; large-sum payments via cash, WeChat, or Alipay are strictly prohibited. Keep complete records, including employment contracts, attendance records, performance evaluations, individual income tax payment certificates, and social insurance contribution receipts. Under the “Golden Tax Phase IV” data transparency requirements, the completeness of the chain of evidence directly determines the outcome of tax audits.

IV. “Transition Period Benefits” for Micro and Small Enterprises: Compliance Efforts Cannot Wait

For small and micro enterprises, being “not yet included” provides a rare grace period, but efforts to ensure compliance should proceed in parallel. There are three reasons for this.

Reason 1: The grace period is subject to change at any time. The policy states that they are “not yet included,” and does not promise a long-term exemption. As large and medium-sized enterprises complete their compliance rectifications, regulatory resources will naturally be extended to small and micro enterprises.

Reason 2: Data integration under the Golden Tax Phase IV system does not distinguish between companies based on size. Whenever a company files social insurance, individual income tax, or corporate income tax returns, the data is entered into the Golden Tax Phase IV database. If the system flags any anomalies, the cost of resolving them will be far higher than the cost of ensuring compliance from the outset.

Reason 3: Business expansion requires a foundation of compliance. Many small and micro-enterprises will grow into medium-sized enterprises over the next 1–3 years, or may find themselves involved in scenarios such as bidding, financing, or going public. Ensuring compliance with social security, individual income tax, and other tax regulations in advance will allow companies to proceed seamlessly as they expand their operations, avoiding the awkward situation of having to retroactively obtain the necessary certifications.

Small and micro-enterprises can start by addressing three key areas: First, verify that the number of employees enrolled in social insurance matches the number reported on individual income tax returns; second, verify that the social insurance contribution base aligns with the wages reported on individual income tax returns; and third, standardize the procedures for adding or removing employees from the social insurance rolls during onboarding, resignation, and job reassignment. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as annual review and auditing, bookkeeping and tax filing, tax compliance, information updates, bank account opening, ODI filing, FDI filing, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore Employment Pass (EP) application services; and cross-border e-commerce mentoring and agency operations—all as part of our one-stop service. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

“The policy of ”not retroactively investigating past issues“ reflects the policy’s compassion, but ”data-driven tax administration” will not compromise on accuracy for the sake of compassion. For businesses, the most rational approach is to use this grace period to solidify their compliance foundation, ensuring that data on social security, individual income tax, and corporate income tax form a complete closed loop—one that can withstand scrutiny in any system comparison.