Your First Stage of Tax and Accounting Tasks After Starting to Trade
Author: Junanda ConsultingReviewed by: Junanda Service Team2026-09-19
Obtaining the business licence is only the starting point. What really determines whether a company remains clean, verifiable and able to raise finance later is the first few months after it begins to trade. If the framework for the first stage of tax and accounting tasks is set up properly, everything that follows is easier. If it is left to be dealt with "later", problems tend to surface all at once at the first filing, the first invoice or the first inspection. This article works through the key matters for this stage in chronological order.
1. Setting Up the Books and Choosing an Accounting System
An enterprise should keep accounting books in accordance with the law from the date it obtains its business licence or the date of its first transaction. There are two main accounting systems:
| System |
Considerations for use |
Notes |
| Accounting Standards for Small Business Enterprises |
Smaller scale, no listing or public accountability requirements |
Relatively simplified accounting, with fewer statement presentation requirements |
| Accounting Standards for Business Enterprises |
Where there is a need for financing, listing or group consolidation |
More detailed accounting, placing higher demands on finance personnel |
The choice should take into account the actual size of the enterprise, whether there are external financing plans, whether the group requires consolidated statements, and what shareholders and management need from financial information. Once a system has been decided, it should not be changed frequently. Books, vouchers, statements and similar materials must be retained for the prescribed periods; the specific periods are subject to the latest official versions.
2. Tax Category Determination and Filing Cycles
After completing tax registration, confirm the tax categories that have been determined and the filing cycles that apply:
- Value-Added Tax (VAT): small-scale taxpayers generally file quarterly, and general taxpayers generally file monthly;
- Corporate Income Tax (CIT): generally prepaid quarterly, with an annual reconciliation;
- Surcharges: paid at the same time as the VAT filing;
- Individual income tax: wages and salaries are generally withheld and remitted monthly;
- Stamp duty, property tax, urban land use tax and others: filed according to the determined tax categories and cycles.
The filing cycle is subject to the determination of the competent tax authority. The key point is to log in to the electronic tax bureau and confirm the tax categories and filing deadlines that actually apply to your entity; do not rely on assumptions based on experience. Late filing may give rise to a late payment surcharge and may affect the tax credit rating.
A related point arises frequently in practice. After starting to trade, a company that has not yet earned revenue may assume that no tax-related matters need to be handled at all, and consequently misses the first filing period or the first information confirmation deadline. The correct approach is to handle the relevant tax matters promptly after completing business registration, in accordance with the requirements of the competent tax authority, to check the determined tax categories in the electronic tax bureau, and to record the filing cycles. If the business model changes — for example, if exports begin, invoices begin to be issued, or the operating address moves — the company should take the initiative to confirm whether a supplementary determination or change of information is required.
An enterprise should also keep a "tax matters register" recording at least: the tax registration information, the tax categories and cycles determined, the status of invoice collection, the filing and payment records, and the timing of annual items such as the CIT annual reconciliation and the annual business report. The register can be simple, but it shows the company what to do and when, rather than depending on memory.
3. Taxpayer Status: Choosing Between Small-Scale and General Taxpayer
Small-scale and general taxpayers differ mainly in how tax is calculated, whether input tax can be credited, and the invoices that can be issued.
- Small-scale taxpayer: the calculation is relatively simple, and in most cases certain benefits are available, but input tax generally cannot be credited and there are restrictions on the customers to whom invoices can be issued.
- General taxpayer: input VAT can be credited, which suits businesses with ample input and customers that are mostly general taxpayers.
The logic of the choice turns on customer structure (whether the counterparty needs a special VAT invoice), input structure (whether purchases can be supported by compliant special VAT invoices) and business scale and rate of growth. The threshold for general taxpayer status, where the conditions are met, is subject to the latest official versions. Once registered as a general taxpayer, a business usually cannot revert at will, so the assessment must be made carefully before registration.
4. Invoices, Cost Vouchers and the Reimbursement System
- Issuing: issue invoices truthfully according to the actual business, with the description of goods, amount and tax rate consistent with the contract and the flow of funds;
- Obtaining: compliant invoices should be obtained wherever possible for purchases, rent, utilities, freight and service fees, as the basis for cost deduction;
- Risk: invoices with no underlying real transaction, invoices where the invoice, payment and goods do not correspond, and the issuing or accepting of false invoices are all high-risk behaviours.
We recommend maintaining a register of invoice collection, issuance, voiding and reversal, kept by a designated person, to avoid loss and errors.
A simple reimbursement system should be established at this first stage:
- Define the scope and standard of reimbursable items (travel, entertainment, office supplies, communications and so on);
- Require vouchers to correspond to the business content, stating the purpose and the person handling the matter;
- Collect them monthly and record them in a register by expense category;
- Post them to the accounts promptly, avoiding an accumulation that spans financial years.
A mismatch between vouchers and the underlying business is a frequent problem in tax inspections. A system is more effective than an explanation given after the event.
5. Social Insurance, Housing Provident Fund and Bank Accounts
Employers should arrange social insurance for their employees in accordance with the law. Points to note:
- Consistency between the place of participation, the time of participation and the start date of employment;
- Consistency between the contribution base and the payroll and individual income tax filing data;
- Differences in handling for employees on probation, part-time staff and outsourced labour;
- The housing provident fund is handled according to local requirements.
The cross-referencing of social insurance, individual income tax and payroll data is a common line of enquiry. Specific contribution rates and procedural requirements are subject to the latest positions of the local human resources and social security department and the housing provident fund management centre.
On bank accounts and cash flow:
- An enterprise should open a basic corporate account, and business receipts and payments should as far as possible go through corporate accounts;
- Avoid using personal accounts to collect business income over an extended period;
- Shareholder loans, petty cash and inter-company balances should have a written basis and be cleared promptly;
- The flows of funds, contracts, invoices and goods should be kept consistent as far as possible.
Disordered cash flow is the hardest thing for many enterprises to explain during an inspection. The cost of getting this right at the outset is far lower than the cost of remedying it later.
6. The First Filing: Timing Reminders and the Risk of Missed Filings
The point at which enterprises most often run into trouble is the first filing: not being aware that there is a filing obligation, not knowing the deadline, or assuming that no filing is needed when there is no revenue.
- A nil filing is still a filing: having no business does not remove the filing obligation;
- Watch the filing deadlines: complete them in the electronic tax bureau according to the determined cycle;
- Watch surcharges and individual income tax: it is easy to file VAT only and overlook the rest;
- Watch annual items: such as the CIT annual reconciliation and the annual business report.
We recommend setting a fixed reminder on your phone, or handling filing matters together on a fixed date each month.
7. Tax Credit and the Role of Professional Services
The tax credit rating affects invoice collection, export tax rebates and access to credit facilities, among other things. A good rating is a long-term asset. Professional tax services can support bookkeeping set-up, filing, voucher management, assessing which policies apply, and responding to inspections. The enterprise, however, remains the taxpayer, and that responsibility cannot be outsourced.
Self-Check Checklist
- Have all the tax categories and filing cycles applicable to your entity been confirmed?
- Has the accounting system been decided and have the books been set up?
- Is the choice of taxpayer status consistent with your customer and input structure?
- Has a system for issuing invoices and collecting vouchers been established?
- Are the social insurance, housing provident fund, individual income tax and payroll data consistent?
- Do business receipts and payments go through the corporate account, and are inter-company balances cleared promptly?
- Has the first filing been completed on time, and do you remember that a nil filing is still a filing?
- Has a fixed filing reminder been set up?
This article is general business information prepared by Junanda Consulting. Specific policy positions, tax rates, deadlines and procedural requirements are subject to the latest official versions issued by the competent authorities. To understand how these requirements apply to your business, please contact Junanda Consulting for further information and support.
