PROVISIONAL REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA FOR CONTROL OF TAXATION
(Promulgated by the State Council on April 21, 1986)
ISSUING-DEPT: STATE COUNCIL OF CHINA
CHAPTER I GENERAL PROVISIONS
[Article 1] These Regulations are specifically formulated with a view to ensuring the implementation of the state taxation law and policies, strengthening the control of taxation, guaranteeing the state revenue, bringing into full play the leverage of taxation in regulating the economy and promoting the reform of economic structure and the coordinated growth of the national economy.
[Article 2] Except where it is otherwise stipulated in the national law, control over the levying of various kinds of tax taken charge of by the tax authorities shall be exercised according to these Regulations.
All units and individuals obligated to pay taxes (hereinafter referred to as tax-payers) and units and individuals obligated to levy, withhold and pay taxes on behalf of someone else (hereinafter referred to as levying agents) shall fulfill the obligation of paying taxes or levying, withholding or paying taxes on someone else’s behalf according to the stipulations of the tax law.
[Article 3] Levying or reduction of or exemption from taxes shall be subject to the stipulations of the tax law and the tax controlling system. No region, department, unit or individual shall be permitted to make a decision in any form in contradiction with the stipulations of the prevailing tax law and the tax controlling system.
[Article 4] Any unit or individual shall be entitled to inform against and bring to light acts in contravention of the tax law. The tax authorities shall maintain secrecy for the informer and give him rewards according to the stipulations.
[Article 5] The tax authorities shall be responsible for the implementation of these Regulations.
CHAPTER II TAX REGISTRATION
[Article 6] Tax-payers engaging in production and operation, exercising independent economic accounting and approved by the administrative departments for industry and commerce to commence business shall, within 30 days from the day when the business license is obtained, apply to the local tax authorities for the tax registration.
Other units and individuals obligated to pay taxes shall, except where tax registration is uncalled for according to the stipulations of the tax authorities, apply to the local tax authorities for tax registration within 30 days from the day when they become legal tax-payers in accordance with the stipulations of the tax law.
[Article 7] Trans regional branches or sub-branches of tax-payers not exercising independent economic accounting shall, within 30 days from the day of establishment thereof, apply to the respective local tax authorities for registration.
[Article 8] Tax-payers shall, in applying for tax registration, submit the application for tax registration and documents of approval as well as relevant documentary evidence.
The tax authority in charge shall make registration and issue the tax registration certificate upon examination of the application, documents and evidence as stated in the preceding paragraph.
The tax registration certificate shall be used exclusively by the tax-payers and shall not be lent out or transferred.
The tax registration shall include such particulars as the name and address of tax-payers, form of ownership, relationship of jurisdiction, mode and scope of operation and other related matters.
[Article 9] Where, after registration, there is change of operational line, reorganization, formation of separate offices, amalgamation, joint operation, removal, close of business, stoppage of operation, bankruptcy or other happenings necessitating a change in the tax registration, the tax-payers shall, within 30 days from the day when it is approved or declared by the relevant department, apply to the tax authority in charge for a change in the registration, re-registering or cancelling the registration.
[Article 10] Where taxes shall be paid off and invoices/vouchers and documentary evidence shall be submitted for cancellation when effecting a change in the registration, re-registering or cancelling the registration, the tax-payers shall settle with the taxes and submit the invoices and related documentary evidence issued by the tax authorities to the tax authority in charge for cancellation before completing the registration formalities.
CHAPTER III ASSESSMENT OF TAX
[Article 11] Tax-payers making tax registration shall, according to Article 6 hereof, apply to the tax authorities for tax assessment and fill in truthfully tax assessment returns showing the form of ownership, mode and scope of operation, name, function/performance and use of products, income and receipt and other taxable items according to specific conditions.
[Article 12] The tax authority in charge shall examine the tax-payers’ tax assessment returns in accordance with the law, ascertain the description, category, and rate of taxes (unit amount of tax), taxation links, tax calculation basis, time limit for payment of tax, mode of levying, etc. and issue tax assessment statement.
[Article 13] The tax authority in charge shall, in accordance with the law, issue to the levying agents certificates for taxes to be levied, withheld or paid on behalf of someone else, clarifying the description, category, and rate applicable to the taxes to be levied, withheld or paid on behalf of someone else, the time limit for payment, the mode of payment to the state treasury etc.
[Article 14] In case of change in the tax assessment item(s), the tax-payers shall, within 15 days from the day of such change, report to the tax authority in change and amend the tax assessment statement.
Where new products are manufactured, the tax-payers shall submit to the tax authority in charge the examples of and certification for such new products for tax assessment, which shall be returned by the latter upon inspection. In respect of examples which it is inconvenient to submit for inspection, the tax-payers shall apply to the tax authorities for inspection at the plant.
[Article 15] Where new tax is issued or the tax law is amended by the state, the tax authority in charge shall notify the tax-payers and levying agents to observe the amended stipulations, and amend the tax assessment statement and the certificate for levying withholding omissions, bureaus) are prohibited from issuing the licenses.
(4) Except for other stipulation, joint ventures already approved (equity joint ventures, contractual joint ventures and foreign wholly-owned enterprises) may apply for and obtain export licenses once every six months within their business scope, by the annual export plans submitted to and checked and ratified by MFERT in accordance with stipulations of export licensing administration at different levels.
Compensation trade projects already approved and under execution which need export licenses, may apply for and obtain them by the annual compensation trade plans in accordance with the relevant stipulations of licensing administration at different levels.
Projects already approved of processing with materials provided by foreign partners are to apply for and obtain export licenses by annual processing quantities checked and ratified by MFERT in accordance with relevant stipulations of export licensing administration at different levels.
All items above are still to be implemented in accordance with stipulations Administration-Export Document No. 14(86) of MFERT before MFERT checks, ratifies and issues the plans.
To better utilize foreign capital and guide the foreign capital to the right direction, newly executed foreign capital utilizing projects, which are involved in the examination and approvement of export licenses and quota administration, may still implement the relevant stipulations in Administration-Export Document No. 14 of MFERT.
(5) The applying for and obtaining of export licenses of corporations combined with production belonging to various departments under the Central Government are to be handled in accordance with stipulations in Administration-Export Document No. 14 and No. 67(86) of MFERT.
(6) For export administration in special economic zones, MFERT has set to draft Procedures for Foreign Trade Administration in Special Economic Zones jointly with concerned departments. Before the implementation of these procedures, the following regulations are to be implemented for the time being.
a. Export of commodities produced locally by foreign trade enterprises in special economic zones (including commodities with added value of over 20% by processing with materials of inland provinces): Should the commodities are under export licensing administration, export licenses are to be applied for and obtained from the designated issuing units in accordance with stipulations well as on the principle of easiness to control the levying. The main modes comprise: levying through inspection of accounts; levying in a fixed period and at a fixed amount, and levying, withholding and paying on behalf of someone else.
[Article 21] The control over taxation may be resorted to such forms as control by resident personnel at the plant, control in groups or mobile control, etc. to be decided by the tax authorities. Tax-payers’ superior departments, trade associations or professional organizations and neighbourhood organs shall coordinate with and assist the tax authorities in doing well the taxation control work.
[Article 22] Levying agents shall fulfil their obligation by completing the formalities of levying, withholding and paying tax on behalf of someone else. The tax authorities shall pay commission to the levying agents according to stipulations.
[Article 23] The tax authorities shall have the right to inspect and examine and register the tax-payers’ goods and taxable property.
[Article 24] In the case of tax-payers engaging in temporary operation, the tax authority in charge may instruct them to provide tax guarantors or pay tax deposits in advance and pay off the tax within prescribed time. Where the tax is not paid off within the prescribed time, the guarantors shall be responsible for payment thereof or the tax deposits shall be set-off against the tax due.
The tax authority in charge shall issue receipts when receiving tax deposits in advance.
[Article 25] Where the tax is paid in excess of the taxable amount, the tax-payers shall be permitted to apply to the tax authority concerned for a refund within one year from the day when the tax was overpaid. The tax authority concerned shall refund the overpaid amount upon approval by the tax authority at or above the county level. Refund will not be allowed where application therefore is not made within the prescribed period.
CHAPTER VI CONTROL OVER ACCOUNTS AND STATEMENTS AND VOUCHERS
[Article 26] Tax-payers shall set up a perfect financial and accounting system according to the accounting law of the state and stipulations of tax authorities, assign personnel to conduct affairs related to taxation and keep intact books of accounts, vouchers, statements of payments affected, certificates for payment of tax, etc. Tax-payers incapable of setting up and accounting system may postpone doing so upon reporting to and approval by the tax authority at or above the county level, but shall keep intact all relevant vouchers, statements of payments effected, certificates for payment of tax, etc. The levying agents shall, according to stipulations, set up a special account and preserve intact all materials related to levying, withholding and paying tax on behalf of someone else.
In case the accounts, documents and materials stated in the preceding paragraph are lost, the tax authority in charge shall be reported to in time for it to deal with.
[Article 29] The discharge of oily water from an oil tanker of 150 tons gross tonnage and above or any other vessel of 400 tons gross tonnage and above must be conducted in compliance with the state standards and regulations concerning vessel sewage discharge, and accurately recorded in to Oil Record Book.
[Article 30] The discharge of hold-washings and other residues by vessels carrying noxious or corrosive goods must be conducted in compliance with the state regulations for vessel sewage discharge, and be accurately recorded in the Log Book.
[Article 31] The discharge of radioactive substances from nuclear-powered vessels or vessels carrying such substances must be conducted in compliance with the provisions of Article 19 of this Law.
[Article 32] Vessels, when bunkering or loading and unloading oil, must observe the operation instructions and take effective measures to prevent oil spills.
[Article 33] Ship-building, repairing, scrapping and salvaging units shall be provided with pollution-prevention equipment and facilities. During operations, preventive measures shall be taken against pollution of the sea by oils, oily mixtures and other wasters.
[Article 34] In case pollution has arisen from an abnormal discharge of oils, oily mixtures or other harmful wastes or from the falling overboard of noxious or corrosive goods, the vessel concerned shall immediately take measures to control and eliminate such pollution, and shall report to the nearest harbour superintendency administration for investigation and settlement.
[Article 35] In case any vessel is involved in a marine accident which has caused, or is likely to cause, serious pollution damage to the marine environment, the Harbour Superintendency Administration of the People’s Republic of China has the power to take mandatory measures to avoid or minimize such pollution damage.
[Article 36] All vessels have the obligation to watch out for pollution of the sea. Upon discovering acts in violations of law or occurrence of pollution, they shall immediately report to the nearest harbour superintendency administration. Fishing boats may also report to the nearest agency in charge of fishery administration and fishing harbour superintendence.
[Article 37] In the event of pollution caused by vessels that navigate, berth or operate in the sea areas under the jurisdiction of the People’s Republic of China, officers from a harbour superintendency administration of the People’s Republic of China shall go on board the vessel in question to examine and handle the case. Officers from relevant government departments authorized by the Harbour Superintendency Administration may also go on board the vessel to conduct examinations and report the results thereof to the latter for settlement.
CHAPTER VI PREVENTION OF POLLUTION DAMAGE TO THE MARINE ENVIRONMENT BY DUMPING OF WASTES
[Article 38] No entity may dump any kind of wastes into the sea areas under the jurisdiction of the People’s Republic of China without the permission of the state administrative department of marine affairs.
Entities that need waste dumping must file an application with the state administrative department of marine affairs and only after a permit has been granted by the department can the said dumping be carried out.
[Article 39] Entities that have obtained permits for dumping shall have it done at the designated place, within the time limit and in accordance with the conditions specified in the permit. Wastes to be dumped shall be verified by the approving department after their loading. Wastes to be dumped by means of vessels shall be verified by the Harbour Superintendency Administration at the port of departure.
[Article 40] In case of a violation of this Law that has caused, or is likely to cause, pollution damage to the marine environment, the relevant supervising departments prescribed in Article 5 of this Law may order the violator involved to remedy the pollution damage within a definite time, pay a discharging fee, pay the cost for eliminating the pollution and compensate for the loss sustained by the state, and may give the said violator a warning or impose a fine on him. An involved party contesting the decision may file a suit with the people’s court within 15 days of receipt thereof. If a suit is not filed and the decision is not carried out upon the expiration of the period, the supervising department shall request the people’s court to enforce the decision in accordance with law.
[Article 41] Where the tax-payer’s offence against the tax law constitutes a crime, the tax authorities shall request the judicial organs to investigate and affix the responsibility for the crime.
CHAPTER IX APPENDICES
[Article 42] Regulations shall not be applicable to the control over the levying of the income tax of joint ventures using Chinese and foreign investment and foreign enterprises, individual income tax, customs duty and agricultural tax.
[Article 43] The Ministry of Finance shall be responsible for the interpretation of these Regulations, and the people’s governments of various provinces, autonomous regions and municipalities directly under the State Council shall draw up measures for their implementation.
[Article 44] The Regulations shall come into force as of July 1, 1986.