China has implemented a new social insurance collection process in which the Shanghai tax bureau is now collecting the insurance.
Effective since November 1st, 2020, social insurance funds in Shanghai are no longer being collected by the social bureau, and are instead being collected by the tax bureau. It is imperative that employers are compliant with this change, and are ensuring that payments are being made to the correct bureau. Companies with their own social insurance accounts, have the funds deducted directly from their bank. If the client uses the CIIC social security account and does not have its own social insurance accounts, this change will not impact the current process.
Under the new process, the Social Insurance Bureau still manages employee enrollment, and the need for sufficient funding availability in the bank is still required.
Funds to be deducted from the bank account must follow a new two-step process which will need to be set up by all companies.
- Step 1: Utilize an online tax bureau to declare social insurance
- Step 2: Tax agent will sign into the tax bureau website and download an application. This will link the company information to the tax bureau, and certify the social insurance data that was loaded by the SI agent
Once steps one and two are completed, approval will be granted for the funds to be drawn from the account.
Social insurance is now being collected by the tax bureau instead of the social insurance bureau. Employers must acknowledge the above changes and modify practices accordingly, in order to avoid any non-compliance issues and ensure a smooth social insurance payment process. The information shared in this article provides general information only, and not professional advice. If you need to consult on international expansion of your business or have specific questions about local policy compliance, contact us today to speak to one of our experts.
The information shared in this article provides general information only, and not professional advice. If you need to consult on international expansion of your business or have specific questions about local policy compliance, contact us today to speak to one of our experts.
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