Client Profile
Incorporated in Shanghai Free Trade Zone (“FTZ”), the client’s principal business is the sale of high-end Western-style furniture to customers in Shanghai. Established since 2008, the company currently has an office in the FTZ and another in downtown Shanghai, with a total headcount of 30.
Challenges
- The company’s individual income tax (IIT) filing base was inconsistent with the salary amount stated in employment contracts, resulting in under-reported IIT since the company was incorporated.
- Cash revenue was understated, resulting in under-reported corporate income tax (CIT) and value-added tax (VAT).
- Risk of challenges from the tax authority on applicable VAT rate
Our Engagement
- Conduct on-site visit to client’s office and understand the company’s current business situation
- Financial health check
- Accounting health check for FY 2014-2015 and provide health check report and recommendations for required accounting adjustments
- HR health check for FY 2015
- Health check on internal workflow
Results
- Improved internal control over workflow for bank account, cash management, staff claim, vendor payments and supply chain
- Improved inventory management, resulting in more accurate cost calculation
- Minimise risk of challenges from the tax authority
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