Annual final settlement refers to the taxpayer's own calculation of taxable income and income tax payable in this tax year within 5 months from the end of the tax year or within 60 days from the actual business termination in accordance with tax laws, regulations, rules and other relevant provisions on enterprise income tax, determining the amount to be supplemented or refunded in this tax year according to the monthly or quarterly advance payment of enterprise income tax, filling in the annual enterprise income tax return form, handling the annual enterprise income tax return form with the competent tax authorities and providing relevant information required by the tax authorities.

The final settlement objectives are as follows:

1. Domestic enterprises or organizations that carry out independent economic accounting and pay enterprise income tax according to law, including state-owned enterprises, collective enterprises, private enterprises, joint ventures, joint-stock enterprises and organizations with production, operating income and other income;

2. Enterprises with foreign investment and foreign enterprises. Including Chinese-foreign equity joint ventures, Chinese-foreign cooperative ventures and foreign-funded enterprises established in China, as well as foreign companies, enterprises and other economic organizations that have set up institutions and places in China to engage in production and management, but have income from China;

3. Individual income tax for investors of sole proprietorship enterprises and partnership enterprises. Including sole proprietorship enterprises, partnership enterprises, sole proprietorship and partnership private enterprises, partnership law firms registered and established according to law, and other institutions or organizations with unlimited liability and unlimited joint liability for sole proprietorship and partnership established with the approval of relevant government departments in accordance with laws and regulations. Taxpayers shall file annual enterprise income tax returns according to the relevant tax laws, regardless of the profits, losses or tax reduction or exemption periods in the tax year.

To sum up, the final settlement of income tax is actually a process of clearing the income tax of the previous year. It must be submitted to the tax authorities before May 3 1 every year. There is a special summary table, according to accounting standards and tax laws and regulations, the increase is adjusted and the decrease is reduced.

Legal basis:

Article 10 of the Enterprise Income Tax Law of People's Republic of China (PRC)

When calculating taxable income, the following expenses shall not be deducted:

(1) Dividends, bonuses and other equity investment income paid to investors;

(2) enterprise income tax;

(3) tax late fees;

(four) fines, fines and confiscation of property losses;

(5) Donation expenditures other than those specified in Article 9 of this Law;

(6) sponsorship expenditure;

(7) Unapproved reserve expenditure;

(eight) other expenses unrelated to income.