Laws and Regulations

Chinese Law

Source: Ministry of Commerce Website, PRC

Law on the Management of Tax Revenue Collection in the People’s Republic of China

Thursday, November 26, 1998 Posted: 17:01 BJT(0901 GMT)

Chapter I general rules:

1. To enhance the taxation management, normalize the tax collection and payment, protect the legal rights of the taxpayers, to promote the economic and social development, we formulate this law;

2. All the taxes by the taxation organs are suitable to this law;

3. The start , stop, deduction, waiver, refunding, compensation are all determined according to the law;

4. These who are determined to pay the taxes by the law are called the taxpayers;

5. The taxation department of the state council is responsible for all the national tax collection work. All the local taxation bureau, organ or office should be responsible for its local taxation affairs according to the state council;

6. The nation will equip the modern information facilities to the taxation organs to enhance the modernization of the management information system of the taxes collection;

7. The taxation organs should widely spread the taxation laws and regulations and knowledge;

8. The taxpayers and the acting collectors have the rights to know the the laws and regulations from the taxation organs;

9. The taxation organs should strengthen the personnel construction and raise the political qualification of the personnel;

10. All the organs should establish complete inner restriction and supervision system;

11. All the responsibilities in every taxation organs should be clear, and restricting each other;

12. The personnel should evade when related with the unlawful clients;

13. Anyone or any unit can report an offence;

14. The so-called taxation organ means the various grade of taxation bureau, sub-branch, offices etc.;

Chapter II Taxation management First paragraph: taxation registration:

15. The enterprises should register in the taxation organs within 30 days after licenses;

16. The enterprises should make the change registration within 30 days after they made the change in industry and commerce bureau;

17. The registered enterprises should get account in the financial institutions or banks with the taxation licenses;

18. The enterprises should use the taxation licenses according to the state regulations;

19. The taxpayers or acting taxpayers should establish the tax book according to laws and regulations;

20. The taxpayer should send the financial and account system to the taxation bureau;

21. Taxation organ is the supervising organ of the invoices;

22. VAT invoice is printed by the enterprise appointed by the state council taxation supervision department;

23. According to needs, the state will widely spread the use of tax-controlling equipments;

24. The taxpayers should keep the accountant books, and all the receipts according to the national law;

25. The taxpayer should send the tax report forms and the financial and accountant report form to the taxation organ according to the fixed date, content;

26. The taxpayer can send the report form by himself or by letter;

27. It is permitted to prolong the date for report if difficult;

Chapter III Tax collection:

28. Collect the taxes only according to the law. No start, stop, more or less collection etc is permitted by someone self;

29. No one is permitted to collect the tax but eh taxation organ personnel or the consigned ones

30. The acting collector will collect the tax according to the law;

31. The taxpayer and the acting payer should pay the taxes according the regulations by the state in the fixed date;

32. The taxpayers and the acting payers will pay additional 0.05% of the amount everyday for the delay;

33. The taxpayer can apply for deduction and waive of the tax according to national law and will be ratified by the corresponding organ;

34. The taxation should give the finished taxation certificate to the taxpayers;

35. The taxation has the right to verify the tax amount with the following situation: no kook; no materials by destroying the books;

36. The business between the related enterprises should be taxed;

37. The enterprise income before registration must be taxed;

38. The taxation can order the taxpayer to pay the tax if finding the evading phenomenon;

39. After the taxpayer paid all the tax in the due time, the taxation should dismiss the tax security measures instantly;

40. The taxation can take coercing measures if the taxpayers or the acting payers have not paid the taxes in the fixed time;

41. The taxation organ can only take the coercing measures. No others are permitted;

42. The taxation organ should not detain the living necessities and house;

43. The taxation should compensate for the loss with unsuitable acts;

44. The legal person who want to go abroad should clear off all the taxes;

45. The tax has the preference to the other debts;

46. The taxpayer mortgage his house for the owed taxes should be informed clearly with the tax situation;

47. The taxation should give receipts to the mortgaged goods;

48. The taxpayer should inform the taxation organ the situation of being united or divided;

49. The taxpayer should report the dealing of his fixed assets when owing large amount of taxes;

50. The taxpayer will be punished when eager to deal with his fixed assets etc without informing the taxation;

51. The taxation should return the exceeded part of tax;

52. Losses due to the unsuitable acts by the taxation organ will be compensated by the taxpayer;

53. All the taxation should deposit the taxes collected to national reserve;

Chapter IV Taxation inspection:

54. The taxation organ has the right to inspect the followings: 1 books and accounts, 2 the taxable goods etc, 3 credentials and materials etc.;

55. The taxation can taken coercing measures when finding the former evading behaviors;

56. The taxpayer should accept the inspection and inform true situations;

57. The taxation personnel has the right to investigate all the financial situations of the enterprises and the personnel;

58. The taxation personnel can record, photo etc when necessary in inspection;

59. The personnel should show out the licenses;

Chapter V law responsibilities:

60. The taxpayer with the following situations may be penalize 2000 Yuan or 2000-10000 Yuan for serious situation: 1 no registration in fixed time, 2 no book or account according to regulations, 3 no sending the financial and accountant system to the taxation for record etc.;

61. The tax acting collector will be penalized 2000-5000 Yuan if not setting up the books and accountant;

62. Not having sent the taxation materials to the organ will be penalized 2000 Yuan or 2000-10000 Yuan for serious situation;

63. The taxpayers with false invoice, evading, no reporting etc will be penalized half to 5 times the amount;

64. The taxpayers and the tax acting collectors who compile false taxation excuse will be penalized less than 50000 Yuan;

65. The taxpayer who owes the taxes and transfers his assets will be penalized half to 5 times of the amount;

66. Getting the refunded tax from the export will be penalized 1 to 5 times of the amount;

67. The counteraction to the taxation with violence will penalized 1 to 5 times of the amount or sent to the court if serious;

68. The inadequate part of the tax will be ordered to be paid or else the taxpayer will be penalized 10% to 5 times of the amount;

69. The acting collector will be penalized 50% to 3 times of the amount if collecting less or without collecting the due taxes;

70. These who hinders the business of the officials will be penalized less than 10000 Yuan, or 10000 to 50000 Yuan if serious;

91. If there is any difference between the treaties by PRC and foreign countries, the treaties will be referred;

92. If there is any difference between the law and the former old ones, this law is referred;

93. The state council will formulate the details for this law;

94. The law will go into effect at the date of May 1, 2001/9/4.