Expert Insights

Now! NowChina August 2025 - Technology Trends in Accounting Outsourcing

Written by SBASF | Dec 5, 2025 2:41:38 AM

In today's competitive business environment, companies are increasingly seeking ways to enhance operational efficiency and optimise costs. Accounting outsourcing, a well-established strategy, has grown in popularity among enterprises. However, as traditional outsourcing models face growing challenges, rapid technological advancements are bringing fresh opportunities to the field.

To truly unlock the value of digital systems, companies must first map business scenarios to appropriate tools, translate goals into actionable requirements and plan the implementation path alongside long-term maintenance mechanisms. Yet, moving from blueprint to reality is often time consuming and capital intensive. Consequently, more companies are turning to external professional teams to manage tasks like selection, integration, and iteration, allowing internal teams to focus on optimising core business processes.

How we support

With over 20 years of experience, SBA Store Forest is dedicated to supporting the growth of internationally active businesses, helping Chinese companies expand into overseas markets, and assisting foreign companies to set up smoothly in China. We provide one-stop hassle-free solutions in professional auditing, taxation, business consulting, company secretarial and advisory services, accounting and consulting services, human resources consulting and payroll management, and global expansion consulting services

Strategic Management Advisory

We align digital solutions with your business model and future scalability needs. Our tailored strategies address current pain points while supporting long-term growth.

System Implementation

We establish Standard Operating Procedures (SOPs) for key processes and clarify responsibilities by role. During rollout, we conduct trial runs, gather employee feedback and adjust SOPs as needed. This agile approach ensures seamless system integration.

Ongoing Operational Support

Beyond strategy advisory and system implementation, our professional team offers ongoing support across daily operations:

  • Accounting & Advisory: Bookkeeping, reporting, system reviews and optimisation, training and onsite support.
  • Corporate Secretarial & Advisory: Company seal management, documentation, compliance changes (e.g. constitution, legal person, directors), capital-related applications and foreign debt filings.
  • Human Resources & Payroll: HR advisory, onboarding/offboarding, payroll management, personal income tax filing and onsite support.
  • Audit: Internal audit services and coordination of statutory audits.
  • Tax: Transfer pricing, tax optimisation, FX compliance, bilateral taxation agreements and local tax compliance filings.

 

Conclusion

Technology is reshaping the accounting industry, bringing both convenience and innovation. Yet, to harness these benefits requires ongoing learning and adaptation. At SBA Stone Forest, we go beyond offering services to companies, but strive to be a long-term partner. As technology evolves and standards shift, we remain by your side, turning every update into a launchpad for your next stage of growth.

China Updates

Accounting and Taxation

Announcement on Tax Credit Policy for Overseas Investors Using Distributed Profits for Direct Investments

STA Announcement [2025] No.12

Effective July 1, 2025, the new Administrative Measures on Tax and Fee Payer Credit will introduce five credit grades: A, B, M, C, and D. Key highlights from Article 16 are as follows:

Credit Rating Grades

  • Grade A: Annual evaluation benchmark score of above 90 points.
  • Grade B: Annual evaluation benchmark score of above 70 points but below 90 points.
  • Grade M: For newly established business entities or those scoring above 70 points but without income from manufacturing or business operations during the evaluation year;
  • Grade C: Annual evaluation benchmark score of above 40 points but below 70 points.
  • Grade D: Annual evaluation benchmark score of below 40 points or involves serious dishonest acts.

Entities Not Eligible for Grade A

A business entity shall not be rated as Grade A if any of the following apply:

  • Actual operation period is less than 3 years;​
  • Rated as Grade D in the previous evaluation year;​
  • Zero tax payable for 3 consecutive months or 6 cumulative months without valid reason during the evaluation year;​
  • Failure to set up proper accounting or provide accurate tax information;​
  • Involvement in major tax violations (e.g. tax evasion, fraudulent refunds, false invoicing);​
  • Under investigation by public security authorities for tax-related offenses;​
  • Refusal to pay taxes or obstruction of tax inspections;​
  • Identified as an abnormal or fugitive account, or operated by individuals/ entities associated with such accounts or Grade D ratings;​
  • Listed as a major tax offender by the authorities.​

 

Circumstances that Do Not Affect Credit Evaluation

The following will not negatively impact a taxpayer's credit evaluation:

  • Non-compliance caused by tax authority error or force majeure;​
  • Unintentional calculation or clerical errors leading to underpayment;​
  • No administrative penalty imposed under applicable regulation;​
  • Other circumstances recognised by the State Taxation Administration.

 

Tax Credit for Overseas Investors

Where an overseas investor uses profits distributed by a resident enterprise in China for direct investments in China between January 1, 2025 and December 31, 2028 and satisfies the criteria, 10% of the investment amount may be used as a tax credit against the investor’s tax payable for the current year. Any excess portion may be carried forward to future years.

If the applicable tax rate under a tax treaty between China and a foreign government for equity investment income such as dividends, bonuses etc. in is lower than 10%, the conventional treaty tax rate shall prevail.

For the purpose of this Announcement, the criteria for using distributed profits for direct investment include:

  • The profits must be equity investment income such as dividends, bonuses etc. arising from retained income actually distributed by a resident enterprise in China.
  • Domestic direct investment includes equity investments such as capital increase, establishment of new companies or equity acquisitions. It excludes:
    • new investment in or acquisitions of listed company shares
    • capital reserve conversions (unless part of a qualifying strategic investment)
    • The investee shall be engaged in industries which fall under the national catalogue of encouraged industries for foreign investment.
  • The domestic reinvestments made by an overseas investor shall be held for at least five consecutive years (60 months).
  • If the reinvestment is paid in cash, the relevant funds shall be transferred directly from the profit distributing enterprise to the investee or equity transferor, without circulation through other domestic or overseas accounts.
  • If the reinvestment is in non-cash form such as in-kind assets, negotiable securities etc., the relevant asset ownership shall be transferred directly from the profit distributing enterprise to the investee or equity transferor, and may not be held or temporarily held by other enterprises or individuals on its behalf prior to making direct investments.

 

This Announcement has been in effect since January 1, 2025 and remains effective until December 31, 2028. If any tax credit balance remains after December 31, 2028, it may continue to be used until exhausted. 

For investments made by overseas investors between January 1, 2025 and the date of this Announcement, the tax credit policy may be applied retroactively from the promulgation date. The credit can offset taxes generated after the date of promulgation. 

No investment made before January 1, 2025 is eligible for retrospective tax credit. 

 

STA Announcement on Consumption Tax Adjustment Policy for Ultra-Luxury Cars

  • To guide rational consumption, the Ministry of Finance and the State Taxation Administration issued Announcement No. 3 of 2025 on July 17, 2025, adjusting the Consumption Tax (“CT”) policy for ultra-luxury small cars. The announcement mainly adjusts the scope of CT for ultra-luxury small cars.
  • Key changes: Clarify the CT obligations at both the import and retail stages, and supplements and improves other matters related to the CT on ultra-luxury small cars.

 

The specific details of the announcement are listed as follows:

  • The scope of taxation for ultra-luxury small cars has been adjusted based on two criteria: retail price and vehicle type. Specifically, the scope of taxation has been adjusted from ‘passenger vehicles and medium and light commercial passenger vehicles with a retail price of RMB 1,300,000 or above (excluding VAT) to ‘passenger vehicles and medium and light commercial passenger vehicles of all power types (including pure electric, fuel cell, etc.) with a retail price of RMB 900,000 or above per vehicle (excluding VAT).’
  • Meanwhile, ultra-luxury small cars such as pure electric and fuel cell models, which do not have cylinder capacity (displacement), are only subject to CT at the retail stage.
  • Sales of used ultra-luxury cars are exempt from consumption tax.
  • Used cars refer to vehicles that have changed ownership after completing registration procedures but before reaching the national mandatory scrapping standards.
  • Clarifies the definition of sales revenue during the retail stage in CT calculation, i.e. all payments and extra charges related to the purchase of the vehicle that are collected by the taxpayer from the purchaser, including payments charged for accessories, decorations and services.
  • This announcement took effect from July 20, 2025.

 

Human Resources

Notice of Shanghai Municipality on Implementing Social Insurance Subsidies for Employers during Female Employees' Maternity Leave

The notice issued by the Shanghai authorities regarding social insurance subsidies for employers during female employees’ maternity leave has now been officially implemented.

Starting from January 1, 2025, female employees who give birth to children during their employment and whose employers in Shanghai comply with the city’s maternity leave policies (158 days) and continue to pay social insurance premiums during this period, are entitled to social insurance subsidies.

Eligible employers include enterprises, social organisations, law firms, accounting firms, and individual industrial and commercial households that participate in social insurance as a unit.

The subsidy amount is 50% of the employer's actual contribution to the following insurance schemes for the female employee during maternity leave:

  • basic endowment insurance
  • basic medical insurance (including maternity insurance)
  • unemployment insurance
  • work-related injury

The subsidy is provided for six months starting from the month the employee gives birth.

Employer should submit an application to the human resources and social security department of the district in which they pay taxes during the maternity leave. The application must be submitted within one year of the employee’s childbirth and include:

  • The application form for social insurance subsidies
  • The medical certificate of birth

 

Corporate Governance

On July 7, 2025, the National Development and Reform Commission, along with six other departments, jointly issued the Notice on Implementing Several Measures to Encourage Domestic Reinvestment by Foreign-Invested Enterprises.

The Notice consists of twelve articles and applies to foreign-invested enterprises that reinvest their undistributed profits or profits legally distributed to overseas investors in China. It requires all regions to establish project databases for reinvestment by foreign-invested enterprises, with eligible projects entitled to supportive policies.

Key measures include:

  • supporting flexible land use to reduce operating costs
  • streamlining industry access and permit procedures
  • implementing tax incentive policies
  • permitting the in-county transfer of foreign exchange profits in accordance with regulations
  • allowing eligible reinvestment projects to benefit from support policies for imported equipment
  • optimising the management of shareholder loans from overseas
  • encouraging financial institutions to innovate service offerings
  • promoting pilot programs for investment information reporting
  • enhancing information sharing
  • Improving evaluation mechanisms for reinvestment projects