Listed companies on China's A-share market paid a combined 2.53 trillion yuan in various taxes and fees during the first half of this year, marking a 4.5% year-on-year increase.
This growth rate trails the 7.6% rise in operating revenue and the 19.5% surge in net profit recorded by these firms, and also falls below the 5.3% growth in nationwide tax revenue for the period, according to data from the tax authorities. As a result, the comprehensive tax burden for A-share companies, calculated as the ratio of taxes paid to operating revenue, eased by 0.2 percentage points to 6.7% compared with the same period last year.
During the first six months, taxes contributed by listed companies accounted for nearly 26% of total tax revenue collected by tax departments, a level that has remained broadly stable since 2023. While some companies have issued supplementary tax payment announcements this year, drawing market attention, the overall tax burden for these firms remains stable.
So why have the number and scale of tax top-up disclosures by listed companies increased this year?
This is primarily attributed to a heightened sense of compliance among listed companies, particularly their improved adherence to tax laws, alongside a stronger willingness to disclose tax-related matters. Under the active guidance of securities regulators and tax authorities this year, listed companies have proactively strengthened their routine compliance management systems for tax payment, taken the initiative to conduct internal reviews for tax compliance risks, and promptly adjusted differences between tax regulations and financial accounting standards, thereby mitigating risks in the application of tax policies.
Notably, many listed companies have made the compliance management of their subsidiary entities a focal point. According to statistics from tax authorities, among the tax-related announcements released by listed companies this year, over 70% concern voluntary self-corrections and supplementary payments, while more than two-thirds involve disclosures stemming from tax adjustments made by subsidiary firms.
A breakdown of the reasons behind these supplementary tax payments reveals four primary categories.
Incorrect application of tax incentive policies accounts for approximately 40% of cases, such as improperly claiming preferential treatment for high-tech enterprises. Weak internal tax governance within corporate groups represents over 30%, including failures to adjust related-party transactions in accordance with regulations. Oversights in tax filing procedures make up about 20% of cases, such as failing to declare local subsidies that do not meet tax-exemption criteria. Finally, irregularities in invoice deductions, such as obtaining falsely issued invoices from partner enterprises, comprise roughly 5% of instances.
Zhang Wei, dean of the School of Taxation at Jilin University of Finance and Economics, noted that supplementary tax payments are essentially one-off adjustments and constitute normal compliance behavior for enterprises. Such payments do not affect fundamental business operations and help eliminate potential risks, supporting healthy long-term development.
In fact, to improve the business environment, tax authorities have increasingly leveraged big data to guide listed companies through risk alerts and reasoned communication rather than punitive measures. Data shows that from January to August 2026, the number of listed companies subject to tax inspection measures declined by 6.7% year-on-year.
Tang Jiqiang, a professor at the China Financial Research Institute of Southwestern University of Finance and Economics, emphasized that the increasingly standardized information disclosure framework is another factor driving the uptick in tax-related announcements. The revised measures for information disclosure by listed companies, issued by the China Securities Regulatory Commission, further reinforce the obligation to disclose risks, requiring companies to fully and promptly reveal matters that could significantly impact their operations and financial conditions.
"Some listed companies had faced tax top-up matters in prior years but did not publicly disclose them. The refinement of disclosure rules has directly promoted transparency in tax-related payments, which is conducive to fostering lawful compliance and standardized operations," Tang added.
Market reactions to these supplementary tax announcements suggest a shift from previous overreaction to a more rational perspective, as such disclosures serve to clear tax-related risks over the medium to long term. Among listed companies that issued tax-related announcements in 2025-2026, approximately 60% saw no significant share price fluctuations on the announcement day or the following day, while over 40% experienced gains in market value within the same month, indicating that voluntary tax compliance and proactive rectification have gained market acceptance.
A senior official from the State Taxation Administration stated that listed companies play a vital role in serving economic and social development and improving public welfare. The tax authorities will continue to conduct tax collection and management in accordance with the law, actively foster a tax ecosystem that encourages compliance and integrity, and fully implement tax and fee reduction policies. They will also standardize tax inspection procedures for enterprises, strictly investigate tax violations while preventing over-collection of taxes, and assist taxpayers in preventing and resolving tax-related risks, all aimed at creating a fair and law-based tax environment that supports the stable growth of listed companies and other business entities.
Comments