Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection

Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection (Promulgated by the State Council of PRC No.362 2002-09-07 )

Degree of the State Council of the People's Republic of China

The Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection are hereby promulgated and are effective as from October 15, 2002.

Chapter I General Provisions

Article 1 These Detailed Rules are hereby formulated in accordance with the provisions of the Law of the People's Republic of China on the Administration of Tax Collection (hereinafter referred to as the Law on the Administration of Tax Collection)

Article 2 Taxation conducted by tax authorities in accordance with law shall observe the Law on the Administration of Tax Collection and these Detailed Rules. Only if there is no provision in the Law on the Administration of Tax Collection and these Detailed Rules, shall taxation follow the provisions of other laws, tax administrative rules or regulations.

Article 3 Decisions made by any department, unit or individual that go against the tax laws, administrative rules or regulations shall be null and void. Relevant tax authorities shall not implement these decisions and shall report to the tax authorities at a higher level. Taxpayers shall fulfill their obligation of tax payment in accordance with the provisions of tax laws, administrative rules and regulations. Contracts, agreements and other documents signed by them that contradicting tax laws, administrative rules or regulations shall be null and void.

Article 4 The State Administration of Taxation is responsible, in the construction of information system for national tax affairs, for making the general plan, technical standard, technical planning and the implementing method, according to which tax authorities at all levels shall work effectively and specifically in the construction of information system in their respective areas. The local people's governments at all levels shall positively support the construction of information system in taxation and organize the departments concerned to share the relevant information with tax authorities.

Article 5 Matters to be kept confidential for taxpayers and tax withholding agents as mentioned in Article 8 of the Law on the Administration of Tax Collection refer to the business secret and privacy of taxpayers and tax withholding agents. Illegal acts in tax affairs by taxpayers and withholding agents do not fall within the scope of confidentiality.

Article 6 The State Administration of Taxation shall formulate the norm of conduct and standard of service for tax officials. Tax authorities at a higher level shall rectify any illegal acts in tax affairs by the tax authorities at a lower level when they find them. Tax authorities at a lower level shall correct the illegal acts in time according to the decision of the tax authorities at a higher level. Tax authorities at a lower level shall report to the tax authorities at a higher level or relevant department when they find any illegal acts in tax affairs by the tax authorities at a higher level.

Article 7 Tax authorities shall grant awards to offence reporters on the basis of their contributions. Funds needed to pay these awards shall be included in the annual budget of the taxation department and approved separately. The specific method and standard for the use of award-funds shall be jointly formulated by the State Administration of Taxation and the Ministry of Finance.

Article 8 When assessing the amount of tax payable, adjusting the amount of fixed tax payment, conducting a tax inspection, imposing a tax administrative penalty, or conducting a tax administrative reconsideration, tax officials shall withdraw from the case if they have any of the following relationships with the taxpayer or tax withholding agent, or its legal representative or the direct responsible person:

(1) Spouse relationship;

(2) Lineal blood relationship;

(3) Collateral blood relationship within three generations;

(4) Close relative by marriage; or

(5) Any other interest relationship that may influence just execution of law.

Article 9 Taxation organs established according to provisions by the State Council and made known to the public as mentioned in Article 14 of the Law on the Administration of Tax Collection refer to the inspection bureaus of the tax bureaus or offices below the provincial level. The inspection bureaus are specifically responsible for the investigation and handling of cases involving tax evasion, avoidance of pursuance of tax in arrears, tax fraudulence, and refusal to pay tax. The State Administration of Taxation shall clearly define the respective functions of the tax bureau or office and the inspection bureau to avoid any overlap between them.

Chapter II Tax registration

Article 10 Local offices of the State Administration of Taxation (SAT) and local tax bureaus shall use the same code for tax registration of the same taxpayer and share information. The specific measures for tax registration shall be formulated by the State Administration of Taxation.

Article 11 The administrative organs for industry and commerce at every level shall periodically notify the local office of SAT and local tax bureau at the same level on the situations of issuance, alteration, cancellation and revocation of business licenses. The specific method of notification shall be jointly formulated by the State Administration of Taxation and the State Administration for Industry and Commerce.

Article 12 Taxpayers engaged in production or business operations shall, within 30 days after the date of obtaining the business license, file a written application for tax registration with the competent tax authorities in the locality where the production or business operation is conducted or where the tax obligation occurs. They shall factually complete the tax registration form and submit the relevant certificate, documents and information as required by the tax authorities. Taxpayers other than those mentioned in the preceding paragraph, except state organs and individuals, shall, on the presentation of the relevant documents, go through the procedure for tax registration with the competent tax authorities in their locality within 30 days after the date of occurrence of tax obligation. Method of tax registration for taxpayers of individual income tax shall be separately formulated by the State Council. The sample of tax registration certificate shall be determined by the State Administration of Taxation.

Article 13 Tax withholding agents shall, within 30 days after the date of occurrence of tax withholding obligation, apply to the local tax authorities for tax withholding registration and obtaining the tax withholding registration certificate. In case a tax withholding agent already has completed a tax registration procedure, the tax authorities may only record the tax withholding obligation on its tax registration certificate and not issue a separate tax withholding registration certificate to the agent.

Article 14 When any change occurs in the content of tax registration, the taxpayer shall, within 30 days after the date of completing the procedure for changing its business license with the administrative organ for industry and commerce or any other department, apply to the original tax registration authorities for changing its tax registration by presenting the relevant certificates. When any change occurs in the content of tax registration and there is no need to make any change in the registration with the administrative organ for industry and commerce or any other department, the taxpayer shall, within 30 days after the date of such a change, apply to the original tax registration authorities for changing its tax registration by presenting the relevant certificates.

Article 15 When according to law a taxpayer's obligation to pay tax terminates because of dissolution, bankruptcy, cancellation or other reasons, the taxpayer shall, before going through the cancellation of its registration with the administrative organ for industry and commerce or any other department, apply to the original tax authorities for cancellation of its tax registration by presenting the relevant certificates and documents. However, in case of no need for registration with the administrative organ for industry and commerce or any other department according to relevant provisions, the taxpayer shall, within 15 days after the date of approval by relevant department or declaration of the termination, apply to the original tax authorities for cancellation of its tax registration by presenting the relevant certificates. When any change in the taxpayer's place of residence or business site involves the change of tax registration authorities, the taxpayer shall, before going through the alteration or cancellation procedure of registration with the administrative organ for industry and commerce or any other department, or before changing the place of residence or business site, apply to the original tax registration authorities for cancellation of its tax registration, and, within 30 days, apply for tax registration with the tax authorities of the locality to which its place of residence or business site is transferred.

The taxpayer whose business license is revoked by the administrative organ for industry and commerce or whose registration is cancelled by any other department shall, within 15 days after the date of its business license revocation or registration cancellation, apply to the original tax registration authorities for cancellation of its tax registration.

Article 16 Before going through the procedure for cancellation of tax registration, the taxpayer shall settle all payable taxes, surcharge on tax in arrears and penalties, and shall hand over the invoices, tax registration certificate and other tax documents to the tax authorities.

Article 17 The taxpayer engaged in production or business operation shall, within 15 days after the date of opening a basic deposit account or other deposit accounts, report in writing all the account numbers to the competent tax authorities. When any change occurs in them, a written report shall be submitted to the competent tax authorities within 15 days after the date of such a change.

Article 18 Taxpayers, except those who do not need to obtain a tax registration certificate according to the provisions, must present their tax registration certificate when handling the following matters:

(1) Opening bank accounts;

(2) Applying for tax reduction, exemption or refund;

(3) Applying for extension of tax declaration or deferral of tax payment;

(4) Purchasing of invoices;

(5) Applying for a taxation certificate in case of business operations outside of the region;

(6) Going through the procedure for termination or suspension of business operation; or

(7) Other matters regarding taxation.

Article 19 The tax authorities adopt a system of periodic inspection and replacement of tax registration certificate. The taxpayer shall go with the relevant certificates to the competent tax authorities within the prescribed time limit for certificate inspection or replacement procedures.

Article 20 The taxpayer shall hang up the original tax registration certificate openly in the site of production or business operation or in the office for inspection by the tax authorities. In case the tax registration certificate is lost, the taxpayer shall report within 15 days in writing to the competent tax authorities and make an announcement in the newspaper declaring the lost certificate invalid.

Article 21 When a taxpayer engaged in production or business operation intends to conduct production or business operation activities temporarily in another county (city), it shall present a copy of its tax registration certificate and the certificate of tax administration for business operation outside of the region issued by the tax authorities in its locality to the tax authorities of the intended county (city) for inspection and shall accept the tax administration of tax collection. The taxpayer shall go through the tax registration procedure with the local tax authorities if the time of its production or business operation in that county (city) exceeds 180 days in the aggregate.

Chapter III Administration of Accounting Books and Vouchers

Article 22 Taxpayers engaged in production or business operation shall, within 15 days after the date of receipt of their business license or occurrence of tax obligation, set up accounting books in accordance with the relevant provisions by the state. The accounting books as mentioned in the preceding paragraph refer to the general ledger, detailed account, journal account and other auxiliary accounting books. The general ledger and journal account shall be bound into a book form.

Article 23 Taxpayers engaged in a small scale production or business operation who are truly unable to set up their accounting books may entrust any registered accountant office or accounting personnel approved by the tax authorities with account establishment and book keeping. Taxpayers with real difficulty in retaining such an office or personnel may, upon approval by the tax authorities above the county level, set up a pasting book for receipt and payment vouchers, a record book for purchase and sales of goods, or use a tax control device, in accordance with regulations of the tax authorities.

Article 24 Taxpayers engaged in production or business operation shall, within 15 days after obtaining the tax registration certificate, submit reports on the financial and accounting system or method of financial and accounting settlement to the competent tax authorities for record. Taxpayers keeping book accounts with computers shall submit a report on the accounting software applied to the computer system, the user's manual and related documents, before using them, to the competent tax authorities for record. The computerized accounting system set up by taxpayers shall be in conformity with the relevant provisions by the state. The system shall be able to correctly and completely calculate the receipts or income of the taxpayer.

Article 25 Tax withholding agents shall, within 10 days after the date of occurrence of the withholding obligation in accordance with the provisions of the tax laws and administrative rules or regulations, set up separate accounting books regarding the tax withheld and paid or the tax collected and paid, pursuant to the categories of tax withheld or collected.

Article 26 If taxpayers or tax withholding agents have a sound accounting system and can use computers to accurately and completely calculate the receipts and income, or the tax withheld and paid or collected and paid, the complete written record of accounts put out by the computer system may be regarded as accounting books. However, if the accounting system is not sound, and the computer system can not accurately and completely calculate the receipts and income, or the tax withheld and paid or collected and paid, taxpayers or tax withholding agents shall set up a general ledger and other accounting books related to tax payment or tax withheld and paid or collected and paid.

Article 27 Accounting books, vouchers and financial statements shall be kept and made in the Chinese language. In minority autonomous regions, a local minority language in common use throughout the region may be used simultaneously. Foreign-funded enterprises and foreign enterprises may use a foreign language simultaneously.

Article 28 Taxpayers shall install and use the tax control device as required by the tax authorities, and submit the relevant data and information according to the provisions of the tax authorities. The administrative method for popularizing the tax control device shall be separately formulated by the State Administration of Taxation and subjected to the State Council for approval before implementation.

Article 29 Accounting books, accounting voucher, financial statements, tax payment voucher, invoices, exportation voucher and other tax-related documents should be legal, authentic and complete. Accounting books, accounting voucher, financial statements, tax payment voucher, invoices, exportation voucher and other tax-related documents shall be maintained for 10 years, except if otherwise stipulated in laws or administrative rules or regulations.

Chapter IV Tax Filing

Article 30 Tax authorities shall establish and improve a self-assessment system for taxpayers. Upon approval of the tax authorities, taxpayers or tax withholding agents may file tax returns or submit statements on tax withheld and paid or collected and paid to the tax authorities by mail or by means of electronic data transmission. Electronic data transmission refers to such electronic means as telephone, electronic data exchange, and network transmission approved by the tax authorities.

Article 31 Taxpayers filing tax returns by mail shall use the special uniformed envelope for tax returns and keep the receipt issued by the post office as evidence for return filing. The date carried by the postmark for the posting day shall be the actual date of return filing. Taxpayers filing tax returns electronically shall maintain the relevant documents within the prescribed time limit according to the requirement of the tax authorities, and periodically submit them in writing to the competent tax authorities.

Article 32 Taxpayers with no due tax payment during any taxation period shall also file tax returns according to the relevant provisions. Taxpayers enjoying a tax reduction or exemption shall file tax returns in accordance with the relevant provisions during the period of tax reduction or exemption.

Article 33 Tax returns by taxpayers or statements on tax withheld and paid or collected and paid by tax withholding agents shall mainly include the following content: tax categories and items, taxable items or items on which tax is withheld and paid or collected and paid, base of taxation, deduction items and standard, applicable tax rate or fixed tax payment for each unit, items and amount for tax refund, items and amount for tax reduction or exemption, amount of tax payment or of tax to be withheld and paid or collected and paid, period to which tax payment belongs, deferred tax payment, tax in arrears and surcharge on tax in arrears, etc.

Article 34 Taxpayers shall, at the time of filing tax returns, fill in the tax returns factually and submit to the tax authorities the following relevant documents and materials in the light of the requirement of different situations:

(1) Financial and accounting statements and related explanatory materials;

(2) Contracts, agreements and certificates related to tax payment;

(3) Electronic tax filing information generated by the tax control device;

(4) Certificate of tax administration for business operation outside of the region and the corresponding tax payment voucher;

(5) Relevant documents for evidence issued by the public notary either at home or abroad; and

(6) Other necessary documents or materials required by the tax authorities.

Article 35 Tax withholding agents making statements on tax withheld and paid or collected and paid shall complete the statements factually, and submit to the tax authorities the eligible vouchers for tax withheld and paid or collected and paid and other relevant documents and materials required by the tax authorities.

Article 36 Taxpayers paying tax periodically at a fixed amount may file tax returns in a simpler way or/and by combining tax payment periods.

Article 37 Taxpayers or tax withholding agents with real difficulty in filing tax returns or submitting statements on tax withheld and paid or collected and paid within the prescribed time limit and requiring an extension shall, within the prescribed time limit, apply in writing to the tax authorities for an extension, which shall be handled within the time limit approved the tax authorities. In case taxpayers or tax withholding agents are unable, due to force majeure, to file tax returns or submit statements on tax withheld and paid or collected and paid within the prescribed time limit, an extension is available. However, a report must be submitted to the tax authorities immediately after the force majeure situations have vanished. The tax authorities shall approve the report after ascertaining the fact.

Chapter V Tax Collection

Article 38 Tax authorities shall strengthen the administration of tax collection and establish and improve a responsibility system. Tax authorities shall determine the mode of tax collection pursuant to the principles of ensuring a timely and full remittance of tax revenue to the state treasury, making it as easy as possible for taxpayers to pay tax and reducing taxation cost. Tax authorities shall strengthen the administration of tax refund for exports. The specific administrative method shall be formulated by the State Administration of Taxation with the relevant departments of the State Council.

Article 39 Tax authorities shall, pursuant to the budget accounts and budget levels prescribed by the state, remit in time to the state treasury all types of tax, surcharge on tax in arrears and penalties. Tax authorities shall not occupy, embezzle, retain, or transfer them to any accounts other than the state treasury or the tax revenue accounts prescribed by the state. Any organization or individual shall not alter the budget accounts or budget levels of tax, surcharge on tax in arrears and penalties that have already been remitted to the state treasury.

Article 40 Tax authorities shall, in accordance with the principles of convenience, expeditiousness and safety, actively popularize the use of check, bankcard and electronic settlement for tax payment.

Article 41 Special difficulties mentioned in Article 31 of the Law on the Administration of Tax Collection include one of the following situations that the taxpayer is confronted with:

(1) Where force majeure has caused a great loss to the taxpayer and significantly affected its normal production or business operation; or

(2) Where the taxpayer's cash fund for the current period is not enough to settle tax payment after deducting payment to employees and social insurance premium. The municipal offices of SAT and municipal local tax bureaus of the cities separately listed in the state plan may approve the taxpayer's application for a deferral of tax payment with reference to the limit of power as specified in paragraph 2 of Article 31 of the Law on the Administration of Tax Collection.

Article 42 Taxpayers who are unable to pay their tax within the set time limit shall, before the expiration of that limit, file an application for a deferral with the following documents: the application for tax deferral, balance of currency funds for the current period and statements of all deposit accounts in banks, balance sheet, expenditure budget requested by the tax authorities including salaries of employees, social insurance premiums and so on. Tax authorities shall, within 20 days after receipt of the application for tax deferral, decide whether or not to grant approval. A surcharge shall be imposed upon the taxpayer from the expiry date of the time limit for tax payment in case of no approval of the deferral.

Article 43 Taxpayers eligible for tax reduction or exemption as specified by laws or administrative rules or regulations or approved by competent authorities according to law shall go to the competent tax authorities for the procedure of tax reduction or exemption. Taxpayers shall resume tax payment from the date following the expiry date of the tax reduction or exemption. Taxpayers eligible for tax reduction or exemption shall report to the tax authorities within 15 days starting from the day of any change to the terms for tax reduction or exemption. Taxpayers shall fulfill tax payment liabilities as regulated when they no longer meet the requirement for tax reduction or exemption.

Article 44 Tax authorities may, in line with the principles of being conducive to taxation control and making it as easy as possible for taxpayers to pay tax, and according to relevant provisions of the state, entrust related units or individuals to collect small, scattered, or out-of-the-region tax payment and shall issue to such units or individuals a certificate for tax collection. The entrusted units or individuals shall collect tax lawfully in the name of the tax authorities pursuant to the requirement as stipulated in the certificate, and taxpayers shall on no account refuse to pay tax. In case of refusal by any taxpayer, the entrusted unit or individual shall report without delay to the tax authorities.

Article 45 The tax payment voucher as mentioned in Article 34 of the Law on the Administration of Tax Collection refers to various types of tax payment receipt, letter of tax remittance, duty stamp, tax withholding (collection) receipts and other voucher of tax payment. No unit or individual is allowed, unless appointed by the tax authorities, to print any kind of tax payment voucher. Tax payment voucher shall not be lent, resold, altered or forged. The sample of tax payment receipt and the relevant administrative method shall be determined by the State Administration of Taxation.

Article 46 Tax authorities shall, upon receipt of tax revenue, issue a tax payment voucher to the taxpayer. If the taxpayer pays tax through banks, tax authorities may entrust the bank to issue a tax payment voucher.

Article 47 In case any one of the circumstances listed in Article 35 or Article 37 of the Law on the Administration of Tax Collection applies to the taxpayer, the tax authorities shall be entitled to the right of assessing its amount of tax liability in any one of the following methods:

(1) Referring to the tax burden of other local taxpayers engaged in the same or similar business on a similar scale and with a similar income;

(2) According to the method of business income or cost plus rational expenses and profit;

(3) Calculating or reckoning on the basis of raw materials, fuels, power and others consumed; or

(4) According to any other reasonable method.

In case it is not adequate to correctly assess the amount of tax liability using one of the above-mentioned methods, two or more methods may be adopted simultaneously.

In case the taxpayer objects to the amount of tax liability assessed by the tax authorities in the way as prescribed in this article, it shall provide relevant proof to the tax authorities for recognition, upon which adjustment shall be made.

Article 48 Tax authorities are responsible for grading taxpayers' compliance credit. The method for compliance credit grading shall be formulated by the State Administration of Taxation.

Article 49 Any contractor or lessee with independent power of production or business operation, independent financial accounting, and regularly paying contracting fees or rental to the contract issuer or the lessor shall pay tax on its receipts and income from production or business operation and accept the tax administration, except prescribed otherwise by laws or administrative rules or regulations. The contract issuer or lessor shall, within 30 days after the date of issuance of contract or leasing, report about the contractor or lessee to the competent tax authorities. Otherwise, the contract issuer or the lessor shall assume the joint and several tax liabilities with the contractor or lessee.

Article 50 Taxpayers shall report to the competent tax authorities before liquidation in case of dissolution, cancellation or bankruptcy. The competent tax authorities shall participate in the liquidation in case the tax payment is not settled.

Article 51 The associated enterprises as mentioned in Article 36 of the Law on the Administration of Tax Collection refer to companies, enterprises or other economic entities that have one of the following relationships:

(1) Direct or indirect ownership or control of each other in relation to capital, business operation, purchase, sale, etc;

(2) Direct or indirect ownership or control of both or all by a third party; or

(3) Other associated relationships in terms of interest. Taxpayers have an obligation to provide the local tax authorities with information on prices, expenditure standard and others concerning business transactions with its associated enterprises. The specific method shall be formulated by the State Administration of Taxation.

Article 52 Business transactions between independent enterprises as mentioned in Article 36 of the Law on the Administration of Tax Collection refer to business transactions between enterprises with no associated relationship at fair market prices and following normal business practice.

Article 53 The taxpayer may propose to the competent tax authorities a pricing principle and calculation method for business transactions with its associated enterprises. The competent tax authorities may, after examination and approval of proposal, agree upon the issues of pricing with the taxpayer in advance and supervise over the implementation.

Article 54 Tax authorities may adjust the taxpayer's amount of tax liability in case of one of the following situations in business transactions between the taxpayer and its associated enterprises:

(1) Purchases and sales are not priced according to business transactions between independent enterprises;

(2) The interest paid to or charged by the financing enterprise is over or below the amount acceptable for enterprises with no associated relationships, or the interest rate adopted is higher or lower than the normal rate for the same type of business;

(3) Charge for service is not collected or paid as it normally occurs between independent enterprises;

(4) Business transactions such as transfer of property and provision of right to use property are not priced or charges are not collected or paid as they should be with business transactions between independent enterprises; or

(5) Other circumstances where business transactions are not priced in accordance with the normal practice between independent enterprises.

Article 55 In case any one of the circumstances listed in Article 54 of the Detailed Rules applies to the taxpayer, the tax authorities may adjust the taxpayer's taxable receipts or income according to the following methods:

(1) According to the price for the same or similar business transactions between independent enterprises;

(2) According to the level of income and profit obtainable on the basis of the resale price to a non-associated third party;

(3) According to the method of cost plus reasonable expenses and profit; or

(4) According to other appropriate methods.

Article 56 When payment or receipt of prices or charges in business transactions between a taxpayer and its associated enterprise is not made as it should be with business transactions between independent enterprises, the tax authorities shall make adjustment, within 3 years after the first tax year for such transactions, or under special circumstances within 10 years after the first tax year for such transactions.

Article 57 Taxpayers engaged in production or business operation without completing formalities for tax registration as mentioned in Article 37 of the Law on the Administration of Tax Collection include those conducting production or business operation in another county (city) without reporting to the local tax authorities for registration.

Article 58 The taxpayer shall pay tax within 15 days after the date when the tax authorities detain its commodities or goods in accordance with Article 37 of the Law on the Administration of Tax Collection. As for the detained commodities or goods which are live and fresh, apt-decaying or easy-deactivating, the tax authorities may cut the detaining time as prescribed in the preceding paragraph.

Article 59 Other properties as mentioned in Article 38 and Article 40 of the Law on the Administration of Tax Collection include immovable and movable properties such as real estate, cash, marketable securities and so on. Motor vehicles, gold and silver ornaments, curio calligraphy and paintings, luxurious residential buildings or houses other than the one necessary for living do not fall into the scope of articles and dwelling houses necessary to support the individual and its dependent family members as mentioned in Article 38, Article 40 and Article 42 of the Law on the Administration of Tax Collection. Tax authorities shall not adopt tax protective measures and compulsory enforcement measures on other household goods with the unit price below RMB 5,000 yuan.

Article 60 Family members supported by a taxpayer as stated in Articles 38, 40 and 42 of the Tax Administration and Collection Law shall refer to the taxpayer's living-together spouse, lineal relatives and other relatives without living sources and supported by the taxpayer.

Article 61 The guarantee as mentioned in Article 38 and Article 88 of the Law on the Administration of Tax Collection refers to the guaranty for tax payment provided for a taxpayer by a guarantor approved by the tax authorities, or the guaranty provided with the taxpayer's or a third party's property which has not been pledged at all or entirely. The tax payment guarantor refers to any natural person, legal person or other economic entity within the Chinese territory that is able to provide guaranty for tax payment. Any unit or individual without guarantee qualifications as prescribed by laws or administrative rules or regulations is not allowed to serve as a tax payment guarantor.

Article 62 The tax payment guarantor who is willing to provide guarantee for a taxpayer shall fill in a tax payment guarantee form stating clearly the target, scope, duration and liabilities of guarantee and other relevant issues. A letter of guarantee shall be deemed to be valid only after it is signed and stamped by the taxpayer and the tax payment guarantor and approved by the tax authorities. In case a taxpayer or a third party provides a guarantee for tax payment with its property, a detailed list of property shall be filled in, indicating the value of the property and other relevant issues. The detailed list of property secured for tax payment shall be valid only after it is signed and stamped by the taxpayer or the third party and confirmed by the tax authorities.

Article 63 When detaining or sealing up commodities, goods or other property, the tax authorities shall have two or more officials present on the site and notify the person subject to enforcement. In case the person subject to enforcement is a natural person, he or an adult member of his family shall be notified to be present; in case the person subject to enforcement is a legal person or other organization, its legal representative or principal responsible officer shall be notified to be present. Any refusal of presence shall not affect the enforcement.

Article 64 When detaining or sealing up commodities, goods or other property with an equivalent value to the amount of tax payable, in accordance with the provisions of Article 37, Article 38 and Article 40 of the Law on the Administration of Tax Collection, the tax authorities shall estimate the value with reference to the market price, ex-factory price or evaluated price. Surcharge on tax in arrears and expenses for detaining, sealing up, keeping, auction and selling off of the commodities, goods or other property shall be included when the tax authorities define the value of such commodities, goods or other property according to the preceding paragraph.

Article 65 Tax authorities may detain, seal up or auction the inseparable commodities, goods or other property with a value exceeding the amount of tax payable in case that the taxpayer, tax withholding agent or tax payment guarantor has no other property available for mandatory enforcement, and use the proceeds therefrom to offset the amount of tax payable, surcharge on tax in arrears, penalty and expenses of detaining, sealing up, keeping and auction and so on.

Article 66 In detaining or sealing up the movable or immovable property with property right certificate in line with the provisions of Article 37, Article 38 and Article 40 of the Law on the Administration of Tax Collection, the tax authorities may instruct the party involved to turn in the certificate for safekeeping and at the same time issue a notice of assistance to the relevant department, which shall not handle ownership transfer formalities of the movable or immovable property in the course of its being detained or sealed up.

Article 67 Tax authorities may instruct the person subject to enforcement to take care of the sealed-up commodities, goods or other property. The safekeeping responsibility shall be borne by the person subject to enforcement. In case the continuous use of the sealed-up property does not cause reduction of its value, the tax authorities may allow the person subject to enforcement to continuously use it. The person subject to enforcement shall bear any loss to the property resulting from its fault in the course of safekeeping or use.

Article 68 In case the taxpayer settles the tax payment within the deadline set by the tax authorities after the tax protective measures are adopted, the tax authorities shall terminate the tax protective measures within 1 day after receiving the tax payment or tax payment receipt from the bank.

Article 69 In case of settling tax payment with detained or sealed-up commodities, goods or other property, the tax authorities shall entrust the auction to auction agencies lawfully set up. In case there is no way for entrusted auction or it is not appropriate for auction, the commodities, goods or other property may be delivered to local commercial enterprises for sale or be put into the taxpayer's responsibility for disposal within a specified time limit. In case there is no way to entrust local commercial enterprises for sale and it is beyond the taxpayer's ability to dispose, the tax authorities may conduct sales upon appraisal by themselves. The detailed method for such sales upon appraisal shall be formulated by the State Administration of Taxation. Commodities prohibited from free purchases or sales by the state shall be purchased by the relevant organization at the price set by the state. The remaining part of the income from auction or sales after deducting the tax payable, surcharge on tax in arrea s, penalty and expenses for the detaining, sealing up, keeping, auction, sales and so on shall be returned to the taxpayer within 3 days.

Article 70 The loss as mentioned in Article 39 and Article 43 of the Law on the Administration of Tax Collection refers to the direct loss incurred to the legitimate rights and interests of the taxpayer, tax withholding agent or tax payment guarantor as a result of a dereliction of duty by the tax authorities.

Article 71 Other financial institutions as mentioned in the Law on the Administration of Tax Collection refer to trust and investment companies, credit cooperatives, post savings offices and other financial institutions approved by the People's Bank of China, China Securities Regulatory Commission or other authorities.

Article 72 Deposit as mentioned in the Law on the Administration of Tax Collection includes savings deposits by investors of solely funded enterprises, partners of partnerships and individual business household, and funds in the shareholder's capital account as well.

Article 73 In case the taxpayer engaged in production or business operation or the tax withholding agent fails to pay or remit tax within the prescribed time limit, or the tax payment guarantor fails to pay the tax guaranteed within the time limit, the tax authorities shall issue a notice of tax settlement for the person involved to pay or remit tax within a specified period of time, not exceeding 15 days.

Article 74 In case the taxpayer or its legal representative fails to settle the tax payment due or surcharge on tax in arrears, or provide guaranty for tax payment as required before leaving the territory of the People's Republic of China, the tax authorities may notify the border control department to prevent its departure. The specific method for preventing departure shall be formulated by the State Administration of Taxation jointly with the Ministry of Public Security.

Article 75 The time period for imposing surcharge on tax in arrears as prescribed in Article 32 of the Law on the Administration of Tax Collection starts with the second day from the expiration date for tax payment specified by laws or administrative rules or regulations, or determined by the tax authorities pursuant to provisions of laws or administrative rules or regulations, and ends with the day on which the taxpayer or tax withholding agent actually pays or remits the tax.

Article 76 Tax authorities above the county level shall regularly make proclamations concerning the overdue tax unpaid by taxpayers at the site of tax collection or through media such as broadcast, television, newspaper, periodical or network, etc. Specific method for such regular proclamation shall be formulated by the State Administration of Taxation.

Article 77 The fairly large amount of overdue tax as mentioned in Article 49 of the Law on the Administration of Tax Collection refers to an amount of overdue tax of more than RMB 50,000 yuan.

Article 78 The tax authorities shall refund the overpaid tax to the taxpayer within 10 days from the date of their discovery, or verify and refund the overpaid tax within 30 days from the date of receiving the taxpayer's application for refund in case of the taxpayer's discovery. The tax refund with interest at the deposit interest rate of the corresponding period of the bank as prescribed in Article 51 of the Law on the Administration of Tax Collection does not include the refund at final tax settlement, or for exportation or tax incentives upon the tax prepaid according to laws or regulations. Interest of the tax refund shall be calculated at the current deposit interest rate set by the People's Bank of China on the day when the tax authorities undertake the procedure for tax refund.

Article 79 In case the taxpayer has both refundable tax and unpaid overdue tax, the tax authorities may use the refundable tax and interest to offset the tax payable and refund the remainder, if any, to the taxpayer.

Article 80 The liability of the tax authorities as mentioned in Article 52 of the Law on the Administration of Tax Collection refers to the improper application of tax laws or administrative rules or regulations or illegal activity of law enforcement by the tax authorities.

Article 81 The miscalculation or other errors by the taxpayer or tax withholding agent as mentioned in Article 52 of the Law on the Administration of Tax Collection refers to the unintentional misapplication of calculation formula or apparent clerical error.

Article 82 The special circumstances as mentioned in Article 52 of the Law on the Administration of Tax Collection refer to the cases where the accumulated amount of due tax unpaid or underpaid, not withheld or less withheld, not collected or less collected exceeds RMB 100,000 yuan on account of the incorrect calculation or other errors by the taxpayer or tax withholding agent.

Article 83 The time limit for making up the shortage in tax payment or pursuing tax payment or surcharge on tax in arrears as prescribed in Article 52 of the Law on the Administration of Tax Collection starts from the day when the taxpayer or tax withholding agent fails to pay or underpays tax, or fails to remit or remit less tax.

Article 84 In case the auditing or fiscal authorities make any decision, in the course of their undertaking the audit or examination according to law, on the illegal act of taxation by the tax authorities, the tax authorities shall follow such decisions. In case the auditing or fiscal authorities discover any illegal tax-related act by the unit under audit or examination, they shall issue a decision or letter of opinion for the unit to pay tax or surcharge on tax in arrears as prescribed to the tax authorities. The tax authorities shall, according to the decision or letter of opinion by relevant authorities and pursuant to provisions of tax laws or administrative rules or regulations, collect the tax or surcharge on tax in arrears according to the scope of tax administration and remit it to the state treasury according to the budget levels as prescribed by the state. Tax authorities shall, within 30 days after the date of receiving the decision or letter of opinion, give a written reply concerning the impleme tation to the auditing or fiscal authorities. The relevant authorities shall not at their own discretion collect or remit to the state treasury, or dispose or occupy in any other name any tax or surcharge on tax in arrears discovered in the process of their duty execution.

Chapter VI Tax Inspection

Article 85 Tax authorities shall establish a scientific inspection system, making overall plans and arrangements for tax inspections, and imposing strict controls on the frequency of tax inspections to taxpayers or withholding agents. Tax authorities shall work out a reasonable guideline for tax inspections, in which the duties of officials respectively in charge of case selection, inspection, hearing or execution shall be clearly defined and separated for mutual restriction in achieving a standardized procedure for case selection and tax inspection. Specific method for undertaking tax inspections shall be formulated by the State Administration of Taxation.

Article 86 Tax authorities may exercise their duties as prescribed in Item 1 of Article 54 of the Law on the Administration of Tax Collection at the business site of the taxpayer or withholding agent. The tax authorities may, if necessary and upon approval of the commissioner of the tax bureau (sub-bureau thereof) or office at or above county level, take back for inspection the taxpayer's or withholding agent's accounting books, accounting vouchers, financial statements and other relevant materials of previous accounting years. The tax authorities shall, however, provide the taxpayer or withholding agent with a list of the documents and return them sound and complete within 3 months. In case of special circumstances, the tax authorities may, upon approval of the commissioner of the tax bureau or office at or above city or autonomous prefecture level, take back for inspection the taxpayer's or withholding agent's accounting books, accounting vouchers, financial statements and other relevant materials of the current accounting year, but shall return them within 30 days.

Article 87 Tax authorities shall, when exercising their duties as prescribed in Item 6 of Article 54 of the Law on the Administration of Tax Collection, designate specific persons for the responsibility. The designated persons shall carry out the duties on the strength of the nationally unified permit for deposit account inspection, and shall have the obligation of keeping confidential the information about the person under inspection. The permit for deposit account inspection s, hall be formulated by the State Administration of Taxation. Items to be inspected by the tax authorities include balance of the taxpayer's deposit account and capital flow.

Article 88 In accordance with the provisions of Article 55 of the Law on the Administration of Tax Collection, the duration of tax protective measures adopted by the tax authorities shall not exceed 6 months normally. In case an extension is necessary for serious cases, it shall be reported to the State Administration of Taxation for an approval.

Article 89 Tax authorities and tax officials shall exercise their duties and power for tax inspection in accordance with the provisions of the Law on the Administration of Tax Collection and the Detailed Rules of it. Tax officials shall present the tax inspection identity card and notice of tax inspection when conducting tax inspections. Taxpayers, withholding agents or other persons involved are entitled to the right of rejecting inspection in case tax officials intend to conduct tax inspection without such card and notice. In case of tax inspection to trading markets and fairs and concentrated business households, the tax authorities may use the unified notice of taxation inspection. The sample and specific method of the use and administration of the notice of tax inspection shall be formulated by the State Administration of Taxation.

Chapter VII Legal Responsibilities

Article 90 In case the taxpayer fails to go through the procedures of inspection or replacement of the tax registration certificate according to provisions, the tax authorities shall order the taxpayer to comply within a time limit, and may impose a penalty of no more than RMB2,000 yuan or between RMB 2,000 yuan and RMB10,000 yuan for serious cases.

Article 91 Persons involved in illegal printing, lending, reselling, altering or forging of tax payment vouchers shall be ordered by the tax authorities to correct accordingly and to pay a penalty between RMB2,000 yuan and RMB10,000 yuan or between RMB10,000 yuan and RMB50,000 yuan for serious cases. In case a crime is formed, criminal responsibilities shall be borne by the persons involved.

Article 92 In case banks or other financial institutions fail to record the number of tax registration certificate in the bank accounts of the taxpayer engaged in production or business operations, or fail to record the bank account numbers in the tax registration certificate of the taxpayer engaged in production or business operations as required by provisions of the Law on the Administration of Tax Collection, the tax authorities shall order them to comply within a time limit and impose a penalty between RMB2,000 yuan and RMB20,000 yuan or between RMB20,000 yuan and RMB50,000 yuan for serious cases.

Article 93 Upon persons involved in illegal providence of bank accounts, invoices, certificates or other convenience to taxpayers or tax withholding agents with a result of non-payment or underpayment of tax or fraudulently obtaining tax refund for exportation, the tax authorities may, apart from confiscating the illegal income, impose a penalty of not more than one time the amount of tax unpaid or underpaid, or of refund fraudulently obtained.

Article 94 In case the taxpayer refuses to have its tax withheld or collected by the tax withholding agent, the latter shall report to the tax authorities, which shall be responsible for collecting the tax payable and surcharge on tax in arrears directly from the taxpayer. In case the taxpayer rejects such payment, the provisions of Article 68 of the Law on the Administration of Tax Collection shall apply.

Article 95 In case the tax authorities inspect the taxpayer at stations, docks, airports, postal enterprises or branches thereof, in accordance with the provisions of Item 5 of Article 54 of the Law on the Administration of Tax Collection, but are rejected by the relevant units, the tax authorities shall order them to comply, and may impose a penalty of not more than RMB10,000 yuan or between RMB10,000 yuan and RMB50,000 yuan for serious cases.

Article 96 The taxpayer or tax withholding agent shall be punished according to the provisions of Article 70 of the Law on the Administration of Tax Collection, in case any one of the following circumstances applies to it:

(1) Providing false information, not reporting according to facts, or refusing to provide relevant information;

(2) Rejecting or preventing the tax authorities from taking notes, tape-recording, video-recording, photographing or copying the situations or materials related to the case under investigation;

(3) Transferring, concealing or destroying the relevant information by the taxpayer or tax withholding agent during the period of inspection; or

(4) Other circumstances of not accepting tax inspection according to law.

Article 97 In case tax officials share illegally amongst themselves the detained or sealed-up commodities, goods or other property, and the circumstance is so serious as to form a crime, they shall bear the criminal responsibilities according to law. In case the circumstance is not serious enough to form a crime, administrative penalties shall be imposed upon them according to law.

Article 98 In case the tax withholding agent violates tax laws or administrative rules or regulations, which results in a non-payment or underpayment of tax by the taxpayer, a penalty between 50 percent and 3 times of the amount unpaid or underpaid by the taxpayer shall be imposed upon the tax withholding agent, apart from the taxpayer being ordered to settle the tax payment.

Article 99 Tax authorities shall issue receipts when imposing a penalty upon or confiscating the illegal income of the taxpayer, tax withholding agent or other persons involved. Otherwise, the taxpayer, tax withholding agent or other persons involved shall have the right to refuse.

Article 100 The dispute over tax payment as mentioned in Article 88 of the Law on the Administration of Tax Collection refers to the dispute arising from the taxpayer, tax withholding agent or tax payment guarantor over such specific administrative actions by the tax authorities as determining the subject of tax payment, target of tax collection, scope of tax collection, tax reduction and exemption, tax refund, applicable tax rate, base of tax assessment, stages of tax payment, period and place of tax payment, means of tax collection, etc.

Chapter VIII Delivery of Writ

Article 101 In case of writ delivery, the tax authorities shall deliver the writ directly to the recipient. In case the recipient is a citizen, the writ shall be delivered to his own reception against his signature. In case the recipient is absent, the writ shall be delivered against signature to the reception of a living-together adult family member of his. In case the recipient is a legal person or other organization, the writ shall be delivered against signature to the reception of the legal representative of the legal person, the principal responsible person of other organization, or the responsible person of finance or the person specifically responsible for reception of documents or letters of the legal person or other organization. In case the recipient has an agent, the writ may be delivered to the agent's reception against signature.

Article 102 There shall be a return certificate for the delivery of taxation writ. The return certificate shall be marked with the date of receipt and signature or signet by the recipient or other person as specified in the Detailed Rules for receipt against signature, upon which delivery shall be recognized.

Article 103 In case the recipient or other person as specified in the Detailed Rules for receipt against signature refuses to sign for receipt of the taxation writ, the deliverer shall specify the reason for refusal and the date on the return certificate which is then marked with the signature or signet of the deliverer and witness, and leave the taxation writ with the recipient, upon which delivery shall be recognized.

Article 104 In case there is difficulty in a direct delivery of the taxation writ, the tax authorities may entrust other relevant authorities or units with the delivery, or deliver it by mail.

Article 105 In case the taxation writ is delivered directly or through entrustment, the date of delivery shall be the date when the recipient or witness signs or specifies for reception on the return certificate. In case the writ is delivered by mail, the date of delivery shall be the date of receipt specified on the return ticket of the registered mail, with the delivery being recognized thereof.

Article 106 Tax authorities may make a public notice for delivery of the taxation writ under any one of the following circumstances and the delivery shall be recognized after 30 days of the public notice:

(1) There are numerous recipients for the same delivery; or

(2) The writ cannot be delivered through other means of delivery specified in this chapter.

Article 107 The format of the taxation writ shall be determined by the State Administration of Taxation. The taxation writ as mentioned in the Detailed Rules includes:

(1) Letter of notification of taxation issues;

(2) Letter of notification of rectification within a prescribed time limit;

(3) Letter of decision for tax protective measures;

(4) Letter of decision for compulsory taxation enforcement;

(5) Letter of notification of tax inspection;

(6) Letter of decision for tax treatment;

(7) Letter of decision of tax administrative punishment;

(8) Letter of decision of administrative reconsideration; and

(9) Other taxation writ.

Chapter IX Supplementary Provisions

Article 108 The terms “more than (above)”, “less than (not more than)”, “within …days” and “on the expiration of …” as mentioned in the Law on the Administration of Tax Collection and the Detailed Rules shall all include the number itself.

Article 109 In case the last day of the prescribed time limit as stipulated in the Law on the Administration of Tax Collection and the Detailed Rules is a legal public holiday, the day following the end of the holiday period shall be treated as the last day of the time limit. In case more than 3 consecutive days in the prescribed time limit are legal public holidays, the prescribed time limit shall be extended accordingly.

Article 110 The commission premium for withholding or entrusted collection of tax as prescribed in Paragraph 3 of Article 30 of the Law on the Administration of Tax Collection shall be included in the budget and paid by the tax authorities to the withholding agent in accordance with the provisions of laws and administrative rules or regulations.

Article 111 The method for taxpayers or tax withholding agents to entrust tax agents with taxation matters shall be formulated by the State Administration of Taxation.

Article 112 The collection and administration of Cultivated Land Occupation Tax, Deed Tax, Agriculture Tax and Animal Husbandry Tax shall be implemented in accordance with the relevant provisions of the State Council.

Article113 These Detailed Rules shall come into force as of October 15, 2002. The Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection promulgated by the State Council on August 4, 1993 shall be repealed at the same time.

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