OVERVIEW OF CHINA'S CURRENT TAX SYSTEM
Tax Legislation

For the time being, the State Organs having authority to formulate tax laws or tax policy mainly include National People' s Congress and its Standing Committee, State Council, Ministry of Finance, State Administration of Taxation, Tariff and Classification Committee of the State Council, and General Administration of Customs.

(a) Tax laws are enacted by the National People' s Congress, e.g., the Individual Income Tax Law of the People' s Republic of China; or enacted by the Standing Committee of the National People's Congress, e.g., the Tax Collection and Administration Law of the People's Republic of China.

(b) The administrative regulations and rules concerning taxation are formulated by the State Council, e.g., the Detailed Rules for the Implementation of the Tax Collection and Administration Law of the People' s Republic of China, the Detailed Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China, the Provisional Regulations of the People' s Republic of China on Value Added Tax.

(c) The departmental rules concerning taxation are formulated by the Ministry of Finance, the State Administration of Taxation, the Tariff and Classification Committee of the State Council, and the General Administration of Customs, e.g., the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value Added Tax, the Provisional Measures for Voluntary Reporting of the Individual Income Tax.

The formulation of tax laws shall follow four steps: drafting, examination, voting and promulgation. The four steps for the formulation of tax administrative regulations and rules are: planning, drafting, verification and promulgation. The four steps mentioned above shall take place in accordance with laws, regulations and rules.

Besides, the laws of China stipulates that within the framework of the national tax laws and regulations, some local tax regulations and rules may be formulated by the People's Congress at provincial level and its Standing Committee, the People' s Congress of minority nationality autonomous prefectures and the People's Government at provincial level. The following table summarises up the current tax laws, regulations and rules and relevant legislation in China.

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