Guide for Banks to Facilitate NRA Account Holders in Paying Corporate Income Tax Smoothly

A Comprehensive Guide on How Banks Can Facilitate Smooth Corporate Income Tax Payments for NRA Accounts

With the continuous deepening of China’s financial openness, an increasing number of foreign investors and enterprises are participating in domestic economic activities through Non-Resident Accounts NRAs. According to the latest policies issued by the State Administration of Foreign Exchange SAFE and the State Taxation Administration STA, non-resident enterprises earning income within China are required to pay corporate income tax in accordance with the law. However, due to the unique nature of NRA accounts, many companies face numerous challenges in practice, particularly during the tax payment process.

As a crucial component of the financial system, banks play a key role in assisting NRA account holders in fulfilling their corporate income tax obligations. This article systematically explores how banks can help NRA account holders complete tax payments smoothly, from the policy background to banking service procedures, common issues, and corresponding solutions.

1. Policy Background The Relationship Between NRA Accounts and Corporate Income Tax

An NRA Non-Resident Account is a RMB or foreign currency account opened by an overseas entity at a Chinese bank, primarily used for financial transactions related to non-resident activities within China. According to relevant regulations, including the STA’s announcements on non-resident enterprise income tax management, non-resident enterprises earning dividends, interest, rental income, or capital gains within China are generally subject to a 10% corporate income tax rate unless reduced by a tax treaty.

In 2025, the State Taxation Administration issued a notice emphasizing the need to strengthen the management of tax sources for non-resident enterprises and improve tax administration efficiency. It also encouraged banks to collaborate with tax authorities to provide convenient and compliant tax services for non-resident enterprises.

2. The Core Role of Banks in NRA Tax Payments

Banks serve not only as channels for fund transfers but also as intermediaries between taxpayers and tax authorities. Their primary responsibilities in the context of NRA corporate income tax payments include

1. Withholding and Remitting Taxes

According to tax law, domestic companies making payments to NRA accounts are required to withhold and remit the applicable corporate income tax. As payment intermediaries, banks must cooperate with domestic payers to complete the tax withholding process.

2. Information Reporting and Compliance Review

Banks are required to review the flow of funds and transaction backgrounds of NRA accounts to ensure compliance with regulatory requirements. They must also report relevant tax-related information to tax authorities, such as verifying whether the enterprise has obtained a tax filing certificate or qualifies for tax treaty benefits.

3. Assisting with Tax Transfers

For non-resident enterprises required to file their own tax returns, banks can assist them in completing tax payments through the electronic tax system, ensuring timely and accurate transfer of tax payments to the national treasury.

3. Detailed Bank Service Process

Example An overseas-funded enterprise receives dividends from its domestic subsidiary through an NRA account.

1. Document Preparation and Review

The domestic payer submits a payment instruction along with documents such as a tax filing certificate, contract, and invoice. The bank reviews the completeness and compliance of the documents and verifies whether the transaction qualifies for a tax treaty benefit.

2. Withholding Tax Calculation and Deduction

Based on the tax filing certificate and relevant tax laws, the bank calculates the applicable tax e.g., 10% and deducts the amount from the total payment.

3. Tax Transfer to the Tax System

The bank transfers the withheld tax to the national treasury via the Horizontal Networking System TIPS, and submits the payment receipt to the tax authorities for record-keeping.

4. Issuing Tax Clearance Certificate and Fund Transfer

After confirming the tax payment has been received, the tax authority issues a tax clearance certificate. The bank then assists in issuing the certificate and transfers the remaining amount to the NRA account.

4. Common Issues and Solutions

Despite the support banks provide, several challenges may arise during the tax payment process

1. Incomplete or Inconsistent Documentation

Incomplete or mismatched documents submitted by domestic enterprises may hinder the payment and tax withholding process.

Solution Enterprises should communicate with tax authorities in advance to ensure completeness and accuracy. Banks should also enhance internal training to improve review efficiency.

2. Unclear Applicability of Tax Treaty Benefits

Some non-resident enterprises claim treaty benefits but fail to provide valid documentation, leaving banks uncertain about the applicable tax rate.

Solution Enterprises should apply for a certificate of tax residency or a filing form for tax treaty benefits in advance. Banks should establish a review mechanism to assess treaty applicability.

3. System Integration Issues

Delays or errors in data integration between banking and tax systems may affect the efficiency of tax transfers.

Solution Strengthen system integration testing and optimize the electronic tax payment process to improve automation.

5. Areas for Bank Service Optimization

To better meet the tax payment needs of NRA account holders, banks can focus on the following areas

1. Establishing an Integrated Service Platform

Launch an online tax service portal offering functions such as tax filing, tax calculation, and tax payment to improve user convenience.

2. Strengthening Collaboration with Tax Authorities

Establish regular communication channels to obtain the latest policy interpretations and assist clients in adapting to regulatory changes.

3. Providing Multilingual and Cross-border Services

Offer multilingual support and cross-border tax advisory services to help overseas enterprises overcome language barriers and improve user experience.

4. Enhancing Staff Expertise

Provide training in international taxation and cross-border payments to improve the professional competence of banking staff.

6. Conclusion

As China’s financial markets continue to open up, the use of NRA accounts will become more widespread, and the demand for non-resident enterprises to pay taxes domestically will continue to grow. As a critical link between enterprises and tax authorities, banks must continuously improve service quality and compliance standards to effectively support NRA account holders in meeting their tax obligations.

By streamlining procedures, enhancing collaboration, and leveraging technological advancements, banks can not only help enterprises fulfill their tax responsibilities efficiently but also build greater trust and expand their presence in the cross-border financial services market.