An e-commerce company in Hangzhou has a long lead time due to theEight consecutive months of zero returnsTheLater, small shipments began, but still zero declarations were made.The Inland Revenue Department (IRD) discovered through bank flows that there were frequent collection records in its account and immediately initiated verification. As the company was unable to provide a reasonable explanation, it was eventually found to have understated its income.Total of $180,000 in back taxes + late fees + penalties.

This loss could have been completely avoided if they had adjusted their filings in time for the business start-up and were guided by a professional financial and tax advisor during the transition period.

Today, we will talk about Hangzhou company long-term zero declaration was checked how to do? Welcome to sweep the code to add our online customer service (micro letter: jxhqcy890 / cell phone: 16625410105), arrange the manager to answer questions, provide professional advice and full one-on-one service!

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01.Why do you check companies that have been filing zero returns for a long time?

In Hangzhou, many start-ups or companies that have not yet started their business will choose to "zero-declaration", i.e., during the tax declaration period.If there is no income and no tax due, just file a blank form.

But if a company continuously Zero filing for 3-6 months or moreThe tax authorities will easily put the company on the "abnormal monitoring list".

The reason is simple:

• Hangzhou tax system has realized multi-departmental data sharing (industry and commerce, banking, social security, platform transactions, etc.), long-term zero declaration but the company's account has money flow, the employee's social security normal payment, it will be marked by the system.
• The IRD will consider that there is a possibility of concealment of income, false invoicing or tax evasion and thus initiate a verification.

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02.What are the consequences of being investigated?

Once investigated, the company could face:

1. pay a tax one has evaded::Recalculate the amount of tax payable on the basis of actual operations and pay back the tax.
2. overdue fine::A late fee of five ten thousandths of a cent per day shall be added from the due date.
3. fine (monetary)::In minor cases, the penalty for non-payment or underpayment of tax is a fine of 50% to 5 times; in serious cases, it may be subject to an audit program.
4. credit impact::Decrease in corporate tax credit rating affects applications for loans, bidding, and government subsidies.

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03.Steps to cope with Hangzhou company after being investigated

If your company has received a tax inquiry or verification notice, you can proceed along the following lines:

1. Don't Ignore the NotificationText messages, phone calls or written communications from the IRS must be responded to in a timely manner, and ignoring them will result in a finding of refusal to cooperate and increased penalties.
2. Preparation of evidence of operationsThis includes bank flows, contracts, invoices, receipts, employee payroll, social security payment records, etc., proving that the company really has no taxable income or has paid the required taxes.
3. Explanation of reasons for zero filingIf it is indeed the preparatory period, the project has not started, seasonal closure, etc., relevant supporting documents are required.
4. Cooperate with the investigation and avoid emotional confrontationRemain professional and cooperative in your communications, and may involve a financial tax advisor or attorney to ensure that explanations are reasonable and information is complete.
5. Follow-up rectificationAdjust the filing method according to the IRD's advice and resume the normal filing rhythm to avoid being monitored again.

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04.How can I prevent being checked in advance?

• Zero-declaration has to be justified(a) Zero declaration can only be made if there is no business, and there are funds in and out and contractual exchanges, which should be declared truthfully.
• Regular compliance checkups:: Quarterly checking of tax returns, reconciliation with bank flows and business contracts.
• Timely preparation of accounts and tax returns when there is business: Even if your income is small, it is important to file the required returns and accumulate a good tax credit history.
• Get a professional team to escort youLocal tax service providers in Hangzhou are familiar with the tax caliber and audit process, and can help you avoid risks at an early stage.

Whether you have the North, Guangzhou, Shenzhen and Hangzhou, Hong Kong to overseas areas such as company registration, bank account opening and other issues, or cross-border e-commerce accounts processing, tax reporting, evidence chain organization, import and export rights filing and tax rebates, Hong Kong company structure to build a framework for business consulting can sweep the code to add our online customer service, welcome to sweep the code to add our online customer service (micro letter: jxhqcy890 / mobile.): 16625410105), arrange the manager to answer questions, provide professional advice and full one-on-one service!

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📌 Hangzhou Tax Compliance Reminder

Long-term zero declaration ≠ securityIn particular, in a city with an active digital economy such as Hangzhou, the tax authorities have access to a wide range of channels for obtaining data.

If your company in Hangzhou has received a tax verification notice, or you are not sure whether your zero declaration is compliant, welcome to leave a message![Tax compliance]We will arrange for a local tax consultant to do the work for you.Free Risk Diagnosis, to help you stabilize the situation and reduce losses.

Whether you have the North, Guangzhou, Shenzhen and Hangzhou, Hong Kong to overseas areas such as company registration, bank account opening and other issues, or cross-border e-commerce accounts processing, tax reporting, evidence chain organization, import and export rights filing and tax rebates, Hong Kong company structure to build a framework for business consulting can sweep the code to add our online customer service, welcome to sweep the code to add our online customer service (micro letter: jxhqcy890 / mobile.): 16625410105), arrange the manager to answer questions, provide professional advice and full one-on-one service!