Updated: 2015-04-24

(Adopted at the 27th Session of the Standing Committee of the Seventh National People’s Congress on September 4, 1992; amended in accordance with the Decision on Amending Tax Collection and Administration Law of the People’s Republic of China made by the Standing Committee of the Eighth National People’s Congress at its 12th Session on February 28, 1995; revised at the 21st Session of the Standing Committee of the Ninth National People’s Congress on April 28, 2001; amended for the second time in accordance with the Decision on Amending Twelve Laws Including Law on the Protection of Cultural Relics of the People’s Republic of China made by the Standing Committee of the Twelfth National People’s Congress at its Third Session on June 29, 2013; amended for the third time in accordance with the Decision on Amending Seven Laws Including Port Law of the People’s Republic of China made by the Standing Committee of the Twelfth National People’s Congress at its 14th Session on April 24, 2015.)

Contents

Chapter I    General Provisions   

Chapter II   Tax Administration

 Section 1    Tax Registration

 Section 2    Administration of Accounting Books and Vouchers

 Section 3    Tax Filing

Chapter III   Tax Collection  

Chapter IV   Tax Examination

Chapter V    Legal Responsibilities

Chapter VI   Supplementary Provisions

Chapter I   General Provisions

Article 1 This Law is enacted for the purpose of strengthening tax administration, standardizing tax collection and payment, ensuring the tax revenue of the State, protecting the legitimate rights and interests of taxpayers and promoting economic and social development.

Article 2 The collection and administration in respect of all taxes to be collected by the tax authorities in accordance with the law shall be governed by this Law.

Article 3 The imposition of tax, the cessation thereof, tax reduction, tax exemption, tax refund and payment of supplemental tax shall be governed by the provisions of relevant laws; where the State Council is authorized by the law to formulate relevant regulations, the provisions of relevant administrative regulations formulated by the State Council shall apply.

No government departments, institutions or individuals shall, in violation of the laws or administrative regulations, make decisions regarding the imposition of tax, the cessation thereof, tax reduction, tax exemption, tax refund, payment of supplemental tax, or any other decision which is in contravention with the laws or administrative regulations.

Article 4 Entities and individuals that are obligated to pay tax as prescribed by laws or administrative regulations are taxpayers.

Entities and individuals that are obligated to withhold and remit tax or collect and remit tax as prescribed by the laws or administrative regulations are withholding agents.

Taxpayers and withholding agents shall pay tax or withhold and remit tax or collect and remit tax in accordance with the provisions of relevant laws or administrative regulations.

Article 5 The taxation department of the State Council shall be in charge of tax collection and administration throughout the country. National tax bureaus and local tax bureaus in various places shall conduct tax collection and administration respectively within the limits set by the State Council.

Local people’s governments at all levels shall strengthen their leadership over the coordination of tax collection and administration, within their respective administrative regions, and support tax authorities in performing their duties in accordance with the law, calculating the amounts of taxes to be paid according to statutory tax rates and collecting taxes in accordance with the law.

Relevant departments shall support and assist tax authorities in performing their duties in accordance with the law.

No entities or individuals shall obstruct tax authorities from performing their duties in accordance with the law.

Article 6 The State, in a planned way, equips tax authorities at various levels with modern information technology, enhances the modernization of the information system for tax collection and administration, and establishes and improves an information-sharing system among tax authorities and other administrative departments of the governments.

Taxpayers, withholding agents and other relevant entities shall, in accordance with relevant State regulations, provide tax authorities with truthful information relating to the payment of or withholding and remittance of or collection and remittance of tax.

Article 7 Tax authorities shall extensively publicize tax laws and administrative regulations, popularize knowledge about payment of tax and provide  taxpayers with free tax counseling.

Article 8 Taxpayers and withholding agents shall have the right to approach tax authorities for information about the provisions of the State laws and administrative regulations on taxation and information relating to the procedures of payment of tax.

Taxpayers and withholding agents shall have the right to request tax authorities to keep their information confidential. Tax authorities shall do so in accordance with the law.

Taxpayers shall, in accordance with the law, have the right to apply for tax reduction, exemption and refund.

With regard to the decisions made by tax authorities, taxpayers and withholding agents shall have the right to be heard and defend themselves; they shall, in accordance with the law, have the right to apply for administrative reconsideration, file an administrative lawsuit and claim State compensation, etc.

Taxpayers and withholding agents shall have the right to accuse tax authorities and officials of their violation of laws and rules of discipline and report such violations.

Article 9 Tax authorities should enhance their workforce and improve the political and vocational quality of tax officials.

Tax authorities and officials shall implement the laws impartially, devote themselves to their duties, be honest and upright, treat people politely, serve taxpayers with civility, respect and protect the rights of taxpayers and withholding agents and, in accordance with the law, accept supervision.

No tax officials shall extort or take bribes, engage in malpractices for personal gain, neglect their duties, fail to collect, or under collect the amount of tax payable; nor shall they abuse their power to over collect tax or deliberately create difficulties for taxpayers or withholding agents.

Article 10 Tax authorities at all levels shall establish and improve a system for internal restriction and supervision.

Tax authorities at higher levels shall, in accordance with the law, exercise supervision over the law-enforcement activities conducted by authorities at lower levels.

Tax authorities at all levels shall conduct inspection of their staff members implementing the laws and administrative regulations and observing the norms for incorruptibility and self-discipline.

Article 11 The functions and responsibilities of the officials of tax authorities in charge of tax collection, administration, investigation and administrative reconsideration shall be explicitly defined and shall be separate from one another and mutually constrained.

Article 12 A tax official who, in collecting taxes or investigating tax violations, is an interested party in relation to the taxpayers or the withholding agents or the said cases, shall recuse himself/herself.

Article 13 Any entity or individual shall have the right to report violations of tax laws and administrative regulations. The authorities receiving such report and the authorities responsible for investigating the case shall keep confidentiality for the whistle-blower. Relevant tax authorities shall grant the whistle-blower rewards in accordance with relevant regulations.

Article 14 Tax authorities mentioned in this Law refer to the tax bureaus at various levels and their sub-bureaus and the tax offices as well as the tax institutions which are established in accordance with the regulations of the State Council and are publicly announced.

Chapter II   Tax Administration

Section 1 Tax Registration

Article 15 Enterprises, their branches and sites engaged in production or business operations in other places, individual businesses and government-affiliated institutions engaged in production or business operations (hereinafter all referred to as taxpayers engaged in production or business operations) shall, within 30 days after the date the business license is obtained, register with tax authorities by presenting relevant documents. The tax authority shall, on the day the application is received, issue the tax registration certificate.

The administrative departments for industry and commerce shall keep the tax authorities regularly informed of their processing of registration and issuing of business licenses upon examination.

The scope of tax registration by taxpayers and withholding agents other than those specified in the first paragraph of this Article and the measures in this regard shall be formulated by the State Council.

Article 16 When a taxpayer engaged in production or business operations intends to make a change in the items of tax registration, it shall, within 30 days after the date it reports such change in the business registration to the administrative departments for industry and commerce or before it submits to the said department an application for deregistration, apply to the tax authorities for the change or deregistration by presenting relevant documents.

Article 17 Any taxpayer engaged in production or business operations shall, in accordance with relevant State regulations and by presenting the tax registration certificate, open a principle deposit account and other deposit accounts in banks or other financial institutions and shall report all the account numbers to the tax authorities.

Banks and other financial institutions shall record in the account of the taxpayer engaged in production or business operations the tax registration certificate number of the taxpayer, and shall record the account of the taxpayers engaged in production or business operations in the tax registration certificate.

Where tax authorities, in accordance with the law, inquire about the accounts of a taxpayer engaged in production or business operations, banks or other financial institutions shall provide assistance.

Article 18 Use of tax registration certificates by taxpayers shall be governed by relevant regulations formulated by the taxation department of the State Council. No tax registration certificate shall be lent, altered, damaged, traded or forged.

Section 2 Administration of Accounting Books and Vouchers

Article 19 Taxpayers and withholding agents shall, in accordance with relevant laws, administrative regulations and regulations of the finance and taxation departments of the State Council, establish accounting books, keep accounts on the basis of legitimate and valid vouchers and conduct accounting.

Article 20 The financial and accounting systems or the financial and accounting procedures and the accounting software of taxpayers engaged in production or business operations shall be submitted to tax authorities for the record.

Where the financial and accounting systems or the financial and accounting procedures of taxpayers or withholding agents contravene relevant regulations on taxation formulated by the State Council or the finance and taxation departments of the State Council, tax payable, and tax withheld and remitted or collected and remitted shall be calculated in accordance with the said regulations.

Article 21 Tax authorities are the departments in charge of invoices and are responsible for the control and supervision over printing, acquisition, issuance, reception, keeping and cancellation of invoices.

When purchasing or selling commodities, providing or receiving business services or engaging in other business activities, all entities and individuals shall issue, use or obtain invoices in accordance with the law.

Measures for control of invoices shall be prescribed by the State Council.

Article 22 The special invoices for value-added tax shall be printed by enterprises designated by the taxation department of the State Council; other invoices shall, in accordance with the regulations of the said department, be printed by the enterprises designated respectively by national tax bureaus and local bureaus of provinces, autonomous regions or municipalities directly under the Central Government.

No enterprises shall print invoices without designation by the tax authorities specified in the preceding paragraph.

Article 23 The State, based on the needs of the tax collection and administration, positively promotes the wide use of tax control devices. Taxpayers shall, in accordance with the regulations, install and use tax control devices, and no one may damage or destroy or, without authorization, alter such devices.

Article 24 Taxpayers engaged in production or business operations and withholding agents shall keep their accounting books, accounting vouchers, tax payment receipts and other relevant information for a period as specified by the finance and taxation departments of the State Council.

No accounting books, vouchers for the accounts, tax payment receipts or other relevant information shall be forged, altered or, without authorization, damaged or destroyed.

Section 3 Tax Filing

Article 25 Taxpayers shall, within the time limit for and according to the items of tax filing as prescribed by the laws or administrative regulations, or as determined by tax authorities in accordance with the laws or administrative regulations, truthfully file tax returns and submit financial and accounting statements as well as other relevant information on tax payments of the taxpayers as required by tax authorities in light of actual needs.

Withholding agents shall, within the time limit for and according to the items of tax filing as prescribed by the laws or administrative regulations, or as determined by tax authorities in accordance with the laws or administrative regulations, file truthful returns on taxes withheld and remitted or collected and remitted as well as other relevant information of the withholding agents as required by tax authorities in light of actual needs.

Article 26 Taxpayers and withholding agents may directly go to tax authorities to file tax returns or file returns on tax withheld and remitted or collected and remitted, or, in accordance with the regulations, complete the filing or submission mentioned above by mail, electronic data transmission or other means.

Article 27 Where taxpayers or withholding agents are unable to file tax returns or file returns on the tax withheld and remitted or collected and remitted within the prescribed time limit, the time limit may be extended upon examination and approval by tax authorities.

The taxpayer who is permitted to file tax returns or file returns on the tax withheld and remitted or collected and remitted within the time limit extended upon approval shall, within the prescribed time limit for tax payment, prepay tax on the basis of the amount of the tax it actually paid in the previous tax period or the amount determined by tax authorities upon examination, and settle the payment within the extended time limit approved upon examination.

Chapter III   Tax Collection

Article 28 Tax authorities shall collect tax in accordance with the provisions of laws and administrative regulations. They shall not, in violation of such provisions, impose, cease to collect, over-collect, under-collect, collect in advance, defer the collection of, or apportion tax.

The amount of agricultural tax payable shall be assessed and determined in accordance with the provisions of laws and administrative regulations.

Article 29 With the exception of tax authorities, tax officials and the entities and individuals authorized by tax authorities in accordance with the laws and administrative regulations, no entity or individual may exercise tax collection activities.

Article 30 Withholding agents shall perform their obligations of withholding or collecting tax in accordance with the provisions of laws and administrative regulations. With respect to entities or individuals that are not obligated to withhold or collect tax as prescribed by the laws and administrative regulations, tax authorities shall not request them to perform such obligations.

When withholding agents perform the obligations of withholding or collecting tax in accordance with the law, taxpayers shall not refuse to pay tax to them. Where a taxpayer refuses to do so, the withholding agent shall promptly report it to tax authorities.

Tax authorities shall, in accordance with relevant regulations, pay to withholding agents commission for withholding or collecting tax.

Article 31 A taxpayer or a withholding agent shall pay or remit tax in compliance with the time limit as prescribed by the laws and administrative regulations, or as determined by tax authorities in accordance with the laws and administrative regulations.

Where a taxpayer is unable to pay tax within the prescribed time limit on account of special difficulties, it may, upon approval by the national tax bureau and local tax bureau of a province, autonomous region or municipality directly under the Central Government, defer tax payment for a maximum period of three months.

Article 32 Where a taxpayer fails to pay tax or a withholding agent fails to remit tax within the specified time limit, the tax authority shall, in addition to ordering the taxpayer or a withholding agent to pay or remit the tax within a time limit, impose a daily surcharge at the rate of 0.05 percent of the amount of tax arrears, from the date the tax payment is due.

Article 33 Taxpayers may, in accordance with the laws and administrative regulations, apply in writing for tax reduction or exemption.

Decisions on tax reduction or exemption made in violation of laws and administrative regulations by the local people’s governments at all levels, relevant departments under the said people’s governments, or by entities or individuals shall be null and void. Tax authorities shall not implement such decisions, and they shall report it to the tax authorities at a higher level.

Article 34 When collecting tax, tax authorities shall issue tax payment receipts to taxpayers. When withholding or collecting tax, withholding agents shall, upon request by taxpayers, issue to them receipts for the tax withheld or collected.

Article 35 If a taxpayer is under one of the following circumstances, tax authorities shall have the power to assess and determine the amount of tax payable:

(1) where the establishment of accounting books is dispensed with in accordance with the provisions of laws and administrative regulations;

(2) where accounting books are required to be established by the provisions of laws and administrative regulations, but they are not established;

(3)where the taxpayer damages or destroys accounting books without authorization or refuses to provide information on tax payment;

(4) where accounting books are established, but the accounts are not in order or information on costs, receipt vouchers and expense vouchers are incomplete, making it difficult to check the books;

(5) where, when the obligation to pay tax arises, the taxpayer fails to file tax returns within the specified time limit and, after being ordered by tax authorities to file tax returns within a time limit, still fails to do so upon expiration of the time limit; and

(6) where tax basis filed by the taxpayer is obviously on the low side and without justifying grounds.

The specific procedure and measures for tax authorities to assess and determine the amounts of the tax payable shall be prescribed by the taxation department of the State Council.

Article 36 The payment or receipt of money or charges in business transactions between an enterprise, or an establishment or site engaged in production or business operations which is set up by a foreign enterprise within the territory of China, and its associated enterprises shall be made in the same manner as the payment or receipt of money or charges in business transactions between independent enterprises. Where the payment or receipt of money or charges is not made in the said manner and thus results in a reduction of taxable income, tax authorities shall have the power to make reasonable adjustment.

Article 37 Where a taxpayer engaged in production or business operations or a taxpayer temporarily engaged in business operations fails to register with tax authorities in accordance with the regulations, the tax authority shall assess and determine its amount of tax payable and order the taxpayer to make the payment. If the taxpayer fails to do so, the tax authority may seize the commodities or goods of a value equivalent to the amount of tax payable. If the taxpayer pays the amount of tax payable after the seizure, the tax authority shall immediately lift the seizure and return the commodities or goods seized. If the taxpayer still fails to pay the amount of tax payable after the seizure, the commodities or goods seized shall, upon approval of the director of the tax authority at or above the county level, be auctioned or sold off in accordance with the law and the proceeds therefrom shall be used to offset the amount of tax payable.

Article 38 Where the tax authority has grounds to believe that a taxpayer engaged in production or business operations commits an act of tax evasion, it may, prior to the stipulated tax period, order the taxpayer to pay the tax payable within a time limit. If, within the time limit, the tax authority discovers evident signs that the taxpayer is transferring or concealing the taxable commodities, goods or other property, or taxable income, it may order the taxpayer to provide a guaranty for the tax payment. If the taxpayer is unable to do so, the tax authority may, upon approval of the director of the tax authority at or above the county level, adopt the following tax conservancy measures:

(1) to notify in writing the bank or any other financial institutions with which the taxpayer has opened an account to freeze the taxpayer’s deposits to the amount equivalent to tax payable; and

(2) to seize or seal up the taxpayer’s commodities, goods or other property to the value equivalent to the amount of tax payable.

Where the taxpayer makes the tax payment within the time limit prescribed in the preceding paragraph, the tax authorities shall immediately lift the tax conservancy measures.

Where the taxpayer fails to do so on the expiration of the time limit, the tax authority may, upon approval of the director of the tax authority at or above the county level, notify in writing the bank or any other financial institutions with which the taxpayer has opened an account to withhold and remit the amount of tax payable from the taxpayer’s frozen deposits, or, in accordance with the law, auction or sell off the commodities, goods or other property seized or sealed up and use the proceeds therefrom to offset the amount of tax payable.

Any housing or articles for use which are necessary for the daily lives of an individual and the family members he/she supports shall not be subject to the tax conservancy measures.

Article 39 Where the tax authority fails to immediately lift the tax conservancy measures after a taxpayer makes the tax payment within the time limit, thus causing losses to the legitimate interests of the taxpayer, the tax authority shall be liable for compensation.

Article 40 Where a taxpayer engaged in production or business operations or a withholding agent fails to pay or remit tax within the prescribed time limit, or a tax payment guarantor fails to pay the guaranteed amount of tax within the prescribed time limit, the tax authority shall order it to pay the tax within a time limit. Where it fails to pay the tax on the expiration of the time limit, the tax authority may, upon approval of the director of the tax authority at or above the county level, adopt the following compulsory enforcement measures:

(1) to notify in writing the bank or any other financial institutions with which the taxpayer, withholding agent or tax payment guarantor has opened an account to withhold and remit tax payable from its deposits;

(2) to seize, seal up or, in accordance with the law, auction or sell off the commodities, goods or other property of the taxpayer, withholding agent or tax payment guarantor, to the value equivalent to the amount of tax payable, and to use the proceeds therefrom to offset the amount of tax payable.

When executing the compulsory enforcement measures, tax authorities shall do the same with regard to the overdue payment surcharge unpaid by the taxpayer, withholding agent or tax payment guarantor mentioned in the preceding paragraph.

Any housing or articles for use which are necessary for the daily lives of an individual and the family members he/she supports shall not be subject to the compulsory enforcement measures.

Article 41 No entities or individuals other than the statutory tax authorities shall exercise the power to adopt tax conservancy measures or compulsory enforcement measures specified in Articles 37, 38 and 40 of this Law.

Article 42 Tax authorities shall adopt tax conservancy measures or compulsory enforcement measures in compliance with the limits of power and the procedures prescribed by the law, and they shall not seal up or seize any housing and articles for use which are necessary for the daily lives of the individuals of the taxpayer and the family members they support.

Article 43 Where tax authorities abuse their power and, in violation of the laws, adopt tax conservancy measures or compulsory enforcement measures, or inappropriately adopt such measures, thus causing losses to the legitimate rights and interests of taxpayers, withholding agents or tax payment guarantors, the tax authorities shall be liable for compensation in accordance with the law.

Article 44 Where a taxpayer, who is in arrears with tax payment, or its legal representative needs to leave the territory of the People’s Republic of China, either of them shall pay the tax payable and the overdue payment surcharge thereon, or provide a guaranty to, the tax authority before leaving the territory of the People’s Republic of China. If neither the tax payable and the overdue payment surcharge thereon are paid nor a guaranty is provided, the tax authority may notify the immigration administration to prevent him/her from leaving the territory of the People’s Republic of China.

Article 45 Tax collection by tax authorities shall have precedence over unwarranted claims, except where otherwise prescribed by law; where tax is overdue before the taxpayer mortgages or pledges its property or before the taxpayer’s property is put a lien on, tax collection shall have precedence over the exercise of mortgage, pledge or lien.

Where a taxpayer is in arrears with tax payment and at the same time fined and its unlawful gains are to be confiscated upon decision by an administrative department, tax collection shall have precedence over the fine and confiscation of unlawful gains.

Tax authorities shall regularly publish information on taxpayers being in arrears with taxes.

Article 46 Where a taxpayer is in arrears with tax payment and puts its property in mortgage or pledge, it shall explain to the mortgagee or pledgee about its tax arrears. The mortgagee or pledgee may request tax authorities to provide information about the arrears.

Article 47 Tax authorities shall issue a receipt when seizing commodities, goods or other property, and issue a detailed list when sealing up commodities, goods or other property.

Article 48 Where taxpayers merge or separate their businesses, they shall report to tax authorities and pay off the tax payable in accordance with the law. If a taxpayer fails to pay off the tax payable at the time of merger, the new taxpayer after the merger shall continue to fulfill the obligation to pay tax; if a taxpayer fails to pay off the tax payable at the time of separation, the new taxpayer after the separation shall bear joint and several liability for the unfulfilled obligation.

Article 49 Any taxpayer who is in arrears with a considerable amount of tax payment shall, before disposing of its real estate or large amount of fixed assets, report it to tax authorities.

Article 50 Where a taxpayer who is in arrears with tax payment is slack in exercising its natural creditor’s rights, or disclaims such rights, or transfers gratis its property, or transfers its property at an evidently unreasonable low price, which the transferee is aware of, thus causing losses to tax collection of the State, the tax authority may, in accordance with the provisions of Articles 73 and 74 of Contract Law, exercise the rights of subrogation and rescission.

Where the tax authority exercises the rights of subrogation and rescission in accordance with the provisions in the preceding paragraph, the taxpayer who is in arrears with tax payment shall not be exempt from fulfilling the obligation to pay the tax or from bearing legal responsibilities.

Article 51 Where the tax authority discovers that a taxpayer makes a tax payment in excess of the amount of tax payable, it shall immediately refund the over-paid payment; where a taxpayer discovers the same, it may, within three years after the date the payment is made, claim from the tax authority a refund of the over-paid payment, plus interest calculated according to the bank interest rates at the time, and the tax authority shall immediately pay back the money upon examination and verification of the case; where such refund involves the State treasury, it shall be dealt with in accordance with the provisions on the administration of the State treasury of relevant laws and administrative regulations.

Article 52 Where a taxpayer or a withholding agent fails to pay tax or underpays tax, for which the responsibility rests with the tax authority, the latter may, within three years, require the taxpayer or a withholding agent to make a supplemental payment without, however, the imposition of any surcharge thereon.

Where a taxpayer or a withholding agent fails to pay or underpays tax owing to its own miscalculation or other errors, the tax authority may, within three years, recover the unpaid tax and the overdue payment surcharge thereon; under special circumstances, the time limit for recovering the tax in arrears may be extended to five years.

Where a taxpayer evades tax, refuses to pay tax or commits tax fraud, the recovery of the unpaid or underpaid tax, the overdue payment surcharge and the tax benefits through fraud shall not be restricted by the time limit prescribed in the preceding paragraph.

Article 53 National tax bureaus and local tax bureaus shall, in conformity with their respective areas of tax collection and administration and the budgetary level prescribed by the State regulations, turn over the collected tax to the State treasury.

Where, in accordance with the law, the audit or finance authorities find out any tax violation, tax authorities shall, based on the decisions or written suggestions of the related authorities and in accordance with the law, turn over the tax and overdue payment surcharge thereon collected to the State treasury in conformity with the budgetary level, and inform in return the related authorities of the result without delay.

Chapter IV   Tax Examination

Article 54 Tax authorities shall have the power to conduct the following tax examinations:

(1) to examine a taxpayer’s accounting books, vouchers for the accounts, statements and relevant information; to examine a withholding agent’s accounting books, accounting vouchers and relevant information in respect of the amount of tax withheld and remitted or collected and remitted;

(2) to examine a taxpayer’s taxable commodities, goods or other property at the taxpayer’s sites where production or business operations are conducted and places where goods are stored; to examine a withholding agent’s operational conditions relating to the withholding and remittance of tax or the collection and remittance of tax;

(3) to order a taxpayer or a withholding agent to furnish documents, certifying papers and information pertaining to the payment of tax or the amount of tax withheld and remitted or collected and remitted;

(4) to make inquiries of a taxpayer or a withholding agent regarding issues and particulars relevant to the payment of tax or the amount of tax withheld and remitted or collected and remitted;

(5) to examine, at railway stations, docks, airports, postal enterprises and their branches, supporting documents, vouchers and information pertaining to the taxable commodities, goods or other property which a taxpayer has delivered for carriage or sent by post; and

(6) upon approval of the director of the tax authority at or above the county level, to inquire about the deposit accounts held by taxpayers engaged in production or business operations, or withholding agents, at banks or other financial institutions. Upon approval of the director of the tax authority at or above the prefecture-level, inquire about the saving deposits of individuals suspected of tax violations during an investigation. Information obtained through inquiry by tax authorities shall not be used for purposes other than tax collection.

Article 55 When the tax authority, in accordance with the law, conducts tax examination of a taxpayer engaged in production or business operations in respect of the tax payment made during earlier tax periods and discovers the taxpayer’s evasion of the obligation to pay tax and evident signs of transfer or concealment of taxable commodities, goods or other property or incomes, it may adopt tax conservancy measures or compulsory enforcement measures in accordance with the power granted by this Law.

Article 56 A taxpayer or a withholding agent shall subject himself to tax examination conducted by tax authorities in accordance with the law, report the particulars truthfully and provide relevant information, and shall not refuse to accept such examinations or conceal any facts.

Article 57 When tax authorities conduct tax examination in accordance with the law, they shall have the power to inquire related entities and individuals about the particulars of taxpayers, withholding agents and other parties in respect of the payment of tax and the amount of tax withheld and remitted or collected and remitted, and the said entities and individuals shall truthfully provide relevant information and certifying papers to the tax authorities.

Article 58 When investigating a case concerning tax violations, tax authorities may take notes and make tape-recordings, video-recordings, photographs and copies of the particulars and materials pertaining to the case.

Article 59 When conducting tax examinations, the officials sent by tax authorities shall present the tax examination certificate and tax examination notice, and shall have the duty to keep confidentiality for the persons under examination; where no such certificate and notice are presented, the persons subject to examination shall have the right to refuse to accept the examination.

Chapter V   Legal Responsibilities

Article 60 Where a taxpayer has one of the following acts, it shall be ordered by the tax authorities to rectify them within a time limit and may be fined not more than RMB 2,000 yuan; if the circumstances are serious, it may be fined not less than 2,000 yuan but not more than 10,000 yuan:

(1) failing to register, change registration, or deregister with tax authorities within the prescribed time limit in accordance with the regulations;

(2) failing to establish and keep accounting books, or keep the vouchers for the accounts and relevant information in accordance with the regulations;

(3) failing to submit the financial and accounting systems or the financial and accounting procedures and the accounting software to tax authorities for the record in accordance with the regulations;

(4) failing to report all the numbers of bank accounts to tax authorities in accordance with the regulations; and

(5) failing to install or use tax control devices in accordance with the regulations, or damaging or destroying or, without authorization, altering such devices.

Where a taxpayer fails to register with the tax authority, the tax authority shall order it to make rectification within a time limit. If it still fails to do so on the expiration of the time limit, the administrative department for industry and commerce shall, upon proposal and request of the tax authority, revoke its business license.

Where a taxpayer fails to use the tax registration certificate in accordance with the regulations, or lends, alters, damages or destroys, trades or forges tax registration certificate, it shall be fined not less than 2,000 yuan but not more than 10,000 yuan; if the circumstances are serious, it shall be fined not less than 10,000 yuan but not more than 50, 000 yuan.

Article 61 Where a withholding agent fails to establish and keep accounting books for the tax withheld and remitted or collected and remitted, or keep the vouchers for the accounts and relevant information regarding the tax withheld and remitted or collected and remitted, in accordance with relevant regulations, it shall be ordered by tax authorities to make rectification within a time limit and may be fined not more than 2,000 yuan; if the circumstances are serious, it shall be fined not less than 2,000 yuan but not more than 5,000 yuan.

Article 62 Where, within the prescribed time limit, a taxpayer fails to file tax returns and submit information on tax payment or a withholding agent fails to file returns on taxes withheld and remitted or collected and remitted and other relevant information, it shall be ordered by tax authorities to make rectification within a time limit and may be fined not more than 2,000 yuan; if the circumstances are serious, it may be fined not less than 2,000 yuan but not more than 10,000 yuan.

Article 63 Tax evasion means that a taxpayer forges, alters, conceals or, without authorization, destroys accounting books or vouchers for the accounts, or overstates expenses or omits or understates incomes in the accounting books, or, after being notified by the tax authority to file tax returns, refuses to do so or files false tax returns, or fails to pay or underpays the amount of tax payable. Where a taxpayer evades tax, the tax authority shall recover the unpaid tax it fails to pay or underpays and the overdue payment surcharge thereon, and the taxpayer shall be fined not less than 50 percent but not more than five times the amount of tax it fails to pay or underpays; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Where a withholding agent fails to pay, or underpays the tax which it withholds or collects by the means mentioned in the preceding paragraph, the tax authority shall recover the tax it fails to pay or underpays and the overdue payment surcharge thereon, and the withholding agent shall be fined not less than 50 percent but not more than five times the amount of tax it fails to pay or underpays; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Article 64 Where a taxpayer or a withholding agent fabricates the tax basis, it shall be ordered by the tax authority to make rectification within a time limit and shall be fined not more than 50,000 yuan.

Where a taxpayer fails to file tax returns, or fails to pay or underpays the tax payable, the tax authority shall recover the unpaid tax it fails to pay or underpays and the overdue payment surcharge thereon, and the taxpayer shall be fined not less than 50 percent but not more than five times the amount of tax it fails to pay or underpays.

Article 65 Where a taxpayer who is in arrears with tax payment adopts the means of transferring or concealing its property, thus preventing the tax authority from recovering the tax in arrears, the tax authority shall recover the unpaid tax and the overdue payment surcharge thereon and shall impose on the taxpayer a fine of not less than 50 percent but not more than five times the amount of the tax in arrears; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Article 66 Where a taxpayer, by filing false export returns or by other means, defrauds the State of export tax refund, the tax authority shall recover the refund through fraud, and the taxpayer shall be fined not less than the amount of the refund but not more than five times that amount; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Where a taxpayer defrauds the State of export tax refund, the tax authority may, within a prescribed time limit, suspend export tax refund for the taxpayer.

Article 67 Refusal to pay tax means refusing to pay tax by resorting to violence or threats.

In such a case, tax authorities shall, in addition to recovering the unpaid tax and the overdue payment surcharge thereon, conduct investigation for criminal responsibility in accordance with the law. If the circumstances are not serious and do not constitute a crime, tax authorities shall recover the unpaid tax and the overdue payment surcharge thereon, and impose a fine not less than one time but not more than five times the amount of the tax.

Article 68 Where a taxpayer or a withholding agent fails to pay or underpays tax that should be paid or remitted within the prescribed time limit and, after ordered by the tax authority to pay or remit the tax within a time limit, still fails to do so on the expiration of the time limit, the tax authority may, in addition to recovering, by adopting compulsory enforcement measures in accordance with the provisions in Article 40 of this Law, the tax that the taxpayer fails to pay or underpays or that the withholding agent fails to remit, impose a fine of not less than 50 percent but not more than five times the amount of tax it fails to pay or underpays or fails to remit.

Article 69 Where a withholding agent fails to withhold or collect tax which should be withheld or collected, the tax authority shall recover the tax, and impose on the withholding agent a fine of not less than 50 percent but not more than three times the amount of tax that should have been withheld or collected.

Article 70 Where a taxpayer or a withholding agent evades, refuses or, by other means, hinders examination by the tax authority, it shall be ordered by the tax authority to make rectification and may be fined not more than 10,000 yuan; if the circumstances are serious, it shall be fined not less than 10,000 yuan but not more than 50,000 yuan.

Article 71 Where anyone, in violation of the provisions of Article 22 of this Law, illegally prints invoices, the tax authority shall destroy the invoices illegally printed, confiscate its unlawful gains and tools for criminal purposes and impose on it a fine of not less than 10,000 yuan but not more than 50,000 yuan; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Article 72 Where a taxpayer engaged in production or business operations or a withholding agent commits an act in violation of the provisions in this Law and refuses to be processed by the tax authority, the tax authority may confiscate its invoices or discontinue offering invoices to it.

Article 73 Where a bank or any other financial institution with which a taxpayer or a withholding agent has opened deposit accounts refuses to accept the tax authority’s examination of the deposit accounts of the said taxpayer or a withholding agent in accordance with the law, or refuses to execute the decision made by the tax authority on freezing the deposits or withholding the tax, or, after receiving the written notice of the tax authority, assists the taxpayer or the withholding agent in transferring its deposits, thus causing the loss of tax, it shall be fined by the tax authority not less than 100,000 yuan but not more than 500,000 yuan, and the persons who are directly in charge and the other persons who are directly responsible shall be fined not less than 1,000 yuan but not more than 10,000 yuan.

Article 74 The imposition of administrative penalties prescribed in this Law, if the fines involved are not more than 2,000 yuan, may be decided by tax offices.

Article 75 The tax and judicial authorities shall, in conformity with the budgetary level, turn over all the revenues from tax-related fines and confiscations to the State treasury.

Article 76 Tax authorities that, in violation of relevant regulations and without authorization, change the scope of tax collection and administration and the budgetary level of the tax, shall be ordered to make rectification within a time limit, and the persons who are directly in charge and the other persons who are directly responsible shall, in accordance with the law, be demoted or dismissed from office, as administrative sanctions.

Article 77 Where a taxpayer or a withholding agent is suspected of committing an offense against the provisions of Article 63, 65, 66, 67 or 71 of this Law, the tax authority shall transfer the case to the judicial authority to be investigated for criminal responsibility in accordance with the law.

Where a tax official, engaging in malpractices for personal gain, fails to transfer in accordance with the law, the case to the judicial authority for investigation for criminal responsibility as he/she should have done, if the circumstances are serious, it shall be investigated for criminal responsibility in accordance with the law.

Article 78 Where anyone collects tax without authorization by the tax authority in accordance with the law, it shall be ordered to return the money and property collected and, in accordance with the law, be given administrative sanctions or penalties; where losses are caused to other persons’ legitimate rights or interests, it shall be liable for compensation in accordance with the law; if a crime is constituted, it shall be investigated for criminal responsibility in accordance with the law.

Article 79 Where the tax authority or tax official seals up or seizes a taxpayer’s housing and articles of use which are necessary for the daily lives of the individuals of the taxpayer and the family members they support, they shall be ordered to return the said housing and articles for use and, in accordance with the law, be given administrative sanctions; if a crime is constituted, they shall be investigated for criminal responsibility in accordance with the law.

Article 80 Where tax officials, working in collusion with taxpayers or withholding agents, instigate or assist them to commit an offense against the provisions in Article 63, 65 or 66 of this Law, if a crime is constituted, the tax officials shall be investigated for criminal responsibility in accordance with the law; if no crime is constituted, they shall be given administrative sanctions in accordance with the law.

Article 81 Where tax officials, by taking advantage of their positions, accept or extort money or property from taxpayers or withholding agents, or seek other illegitimate interests, if a crime is constituted, they shall be investigated for criminal responsibility in accordance with the law; if no crime is constituted, they shall be given administrative sanctions in accordance with the law.

Article 82 Where tax officials, engaging in malpractices for personal gain or neglecting their duties, fail to collect or under-collect the tax that should be collected, thus causing heavy losses to State revenue, if a crime is constituted, they shall be investigated for criminal responsibility in accordance with the law; if no crime is constituted, they shall be given administrative sanctions in accordance with the law.

Tax officials who abuse their power and deliberately create difficulties for taxpayers or withholding agents shall be transferred away from the post for tax collection and, in accordance with the law, be given administrative sanctions.

Where tax officials retaliate against taxpayers or withholding agents who accuse them of and report violation of laws or the code of conduct, or any other whistle-blowers, they shall be given administrative sanctions in accordance with the law; if a crime is constituted, they shall be investigated for criminal responsibility in accordance with the law.

Where tax officials, in violation of the laws and administrative regulations, deliberately over- or under-assess the agricultural yield taxable, thus causing over- or under- collection of tax, infringing upon the peasants’ legitimate rights and interests or undermining the interests of the State, if a crime is constituted, they shall be investigated for criminal responsibility in accordance with the law; if no crime is constituted, they shall be given administrative sanctions in accordance with the law.

Article 83 Where, in violation of the laws and administrative regulations, tax collection is conducted in advance or deferred, or taxes are apportioned, the authorities at a higher level or the administrative supervisory authorities shall order a rectification, and the persons who are directly in charge and the other persons who are directly responsible shall be given administrative sanctions in accordance with the law.

Article 84 Where decisions regarding the imposition or cessation of tax, tax reduction, tax exemption, tax refund, payment of supplemental tax or others contravening the laws and administrative regulations on taxation are made without authorization and in violation of the laws and administrative regulations, in addition to revocation of such decisions in accordance with the provisions of this Law, the amount of tax that should have been collected shall be collected, and the amount of tax that should not have been collected shall be refunded. The persons who are directly in charge and the other persons who are directly responsible shall be held to account administratively by the authority at a higher level; if a crime is constituted, investigation for criminal responsibility shall be conducted in accordance with the law.

Article 85 Where, in collecting tax or in investigating cases of tax violations, tax officials fail to recuse themselves as required by the provisions of this Law, the persons who are directly in charge and other persons who are directly responsible shall be given administrative sanctions in accordance with the law.

Article 86 If any violation of the laws and administrative regulations on taxation subject to administrative penalties has been undetected for five years, no administrative penalties shall be imposed.

Article 87 Where tax officials fail to keep confidentiality for taxpayers, withholding agents or whistle-blowers, the persons who are directly in charge and other persons who are directly responsible shall, in accordance with the law, be given administrative sanctions by the authority which they are affiliated with to or other relevant authorities.

Article 88 Where a tax dispute arises between a taxpayer, withholding agent or tax payment guarantor and the tax authority, the former shall pay or remit the tax payable and the overdue payment surcharge thereon, or provide necessary guaranty in accordance with the decisions made by the tax authority, before it may apply for administrative reconsideration in accordance with the law; if it does not agree with the reconsideration decision, it may file a lawsuit in the People’s Court in accordance with the law.

Where the administrative counterpart does not agree with the penalty decision made or the compulsory enforcement measures or tax conservancy measures adopted by the tax authority, it may, in accordance with the law, apply for administrative reconsideration or file a lawsuit in the People’s Court in accordance with the law.

Where, on the expiration of the time limit, the administrative counterpart does not apply for administrative reconsideration of the penalty decision made by the tax authority, or file a lawsuit in the People’s Court, nor does it comply with the decision, the tax authority that makes the decision may adopt compulsory enforcement measures prescribed in Article 40 of this Law, or apply to the People’s Court for compulsory enforcement of the decision.

Chapter VI   Supplementary Provisions

Article 89 A taxpayer or a withholding agent may entrust a tax agent with the tax affairs on its behalf.

Article 90 Specific measures for the collection and administration of Farmland Occupation Tax, Deed Tax, Agricultural Tax and Livestock Tax shall be formulated by the State Council separately.

The collection and administration of the customs duties and the taxes collected by customs authorities on behalf of tax authorities shall be exercised in accordance with the provisions of relevant laws and administrative regulations.

Article 91 Where the provisions of treaties or agreements on tax concluded between the People’s Republic of China and other countries (regions) contain provisions differing from those of this Law, the provisions of such treaties or agreements shall prevail.

Article 92 Where the tax laws promulgated prior to the implementation of this Law contain provisions differing from those of this Law, the provisions of this Law shall prevail.

Article 93 The implementation rules for this Law shall be formulated by the State Council in accordance with this Law.

Article 94 This Law shall enter into force from May 1, 2001.

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.