Law of the People's Republic of China on the Administration of Tax Collection (Revision 2015)

Effect Level：Laws>Laws

Promulgation Authorities：Standing Committee of the National People's Congress

Release Date：2015.04.24

Effective Date：2015.04.24

Validity Status：valid

Law of the People's Republic of China on the Administration of Tax Collection

Chapter 1 General Provisions

Article 1 The Law of the People's Republic of China on the Administration of Tax Collection (hereinafter the Law) is developed in order to improve the administration of tax collection, regulate tax collection and payment, ensure the tax revenues of the State, safeguard the lawful rights and interests of taxpayers and promote socio-economic development.

Article 2 The Law applies to the administration of collection of all taxes levied by the taxation authorities by law.

Article 3 The imposition, cessation, reduction, exemption and refund of taxes and payment of delinquent tax shall be carried out in accordance with applicable requirements of the laws. Where the State Council is authorized by law to formulate relevant regulations, such regulations shall be observed.

No government agency, entity or individual may, in violation of the laws and/or administrative regulations, make any decision as to the imposition, cessation, reduction, exemption and refund of a tax and payment of delinquent taxes or any decision that is contrary to the tax laws and/or administrative regulations without authorization.

Article 4 Entities and individuals that are obligated to pay taxes pursuant to the laws and administrative regulations are taxpayers

Entities and individuals that are obligated to withhold and remit taxes, or collect and remit taxes pursuant to the laws and administrative regulations are withholding agents.

All taxpayers and withholding agents shall pay taxes, withhold and remit taxes, or collect and remit taxes in accordance with applicable requirements of the laws and/or administrative regulations.

Article 5 The competent department in charge of taxation under the State Council is in charge of the administration of tax collection across the country. The State tax bureaus and the local tax bureaus in different localities are in charge of administration of tax collection within the scope of administration of tax collection specified by the State Council respectively.

The local people's governments at all levels shall strengthen their leadership over or coordination of the administration of tax collection within respective administrative regions, and support the taxation authorities in performing out their duties by law, calculating the amounts of taxes to be paid according to the statutory tax rates and collecting taxes by law.

All related departments and entities shall support and assist the taxation authorities in performing their duties by law.

No entity or individual may prevent the taxation authorities from performing their duties by law.

Article 6 The State will equip the taxation authorities at all levels with modern information technologies, push forward the modernization of the information system for administration of tax collection, establish and improve the information-sharing system among taxation authorities and other administrative departments under the governments in a well-planned manner.

Taxpayers, withholding agents and other relevant entities shall, in accordance with applicable requirements of the State, provide the taxation authorities with information relating to payment， withholding and remittance，or collection and remittance of taxes in a truthful manner.

Article 7 The taxation authorities shall carry out extensive publicity on the laws and administrative regulations on tax collection, popularize knowledge about payment of taxes and provide taxpayers with consulting services relating to payment of taxes free of charge.

Article 8 Taxpayers and withholding agents have the right to inquire the taxation authorities about the requirements of the laws and administrative regulations of the State concerning taxation and the information relating to the tax payment procedures.

Taxpayers and withholding agents have the right to require the taxation authorities to keep confidential the information of taxpayers and withholding agents. The taxation authorities shall keep confidential the information of taxpayers and withholding agents by law.

Taxpayers have the right to apply for tax reduction, tax exemption and refund of taxes by law.

Taxpayers and withholding agents have the right of statement and right of defense against the decisions made by the taxation authorities. They have the right to apply for administrative review, institute administrative proceedings and request State compensation, etc. in accordance with applicable requirements of laws.

Taxpayers and withholding agents have the right to complain about and report the acts of the taxation authorities and their staff in violation of the laws and disciplines.

Article 9 The taxation authorities shall improve team building so as to improve the political and professional quality of the staff.

The taxation authorities and taxation officials shall be impartial in enforcing laws, devoted to their duties, honest and upright, treat people politely, provide them with services in good manners, respect and protect the rights of taxpayers and withholding agents and accept supervision by law.

No taxation official may solicit or take bribes, engage in malpractices for private gains, neglect his/her duties, or fail to collect, or undercollect the taxes accrued; nor may he/she abuse the power to overcollect taxes or deliberately create difficulties for taxpayers or withholding agents.

Article 10 The taxation authorities at all levels shall establish and improve the system for internal restriction and supervision.

The higher level taxation authorities shall supervise over the law-enforcement activities conducted by the lower level taxation authorities by law.

The taxation authorities at all levels shall supervise over and carry out inspection on compliance with the laws, administrative regulations as well as the code of conduct for honesties and self-discipline by their staff.

Article 11 The responsibilities of the staff of the taxation authorities in charge of tax collection, administration, inspection or administrative review shall be clearly defined and separated from each other with interaction.

Article 12 In the event that a taxation official is an interested party in relation to the taxpayer, withholding agent or cases involving violation of the taxation laws in collecting taxes or investigating & dealing with cases involving violation of the taxation laws, the taxation official shall withdraw therefrom.

Article 13 Any entity or individual may blow the whistle on the acts in violation of the laws and administrative regulations. The government agencies that receive the whistle blowing and the government agencies that are responsible for investigating and dealing with the violations shall keep confidential the whistle blower. The taxation authorities shall give the whistle blower rewards according to the regulations.

Article 14 For the purpose of the Law, taxation authorities refers to tax bureaus at all levels, their sub-bureaus and taxation stations as well as tax offices established in accordance with the regulations of the State Council and announced to the public.

Chapter 2 Taxation Administration

Section 1 Tax registration

Article 15 All enterprises, the branches established thereby in non-local places to engage in production or business operations, individually-owned businesses and public institutions engaged in production or business operations (hereinafter all referred to as taxpayers engaged in production or business operations) shall, within 30 days from the date the business license is received, apply to the taxation authorities for tax registration by presenting the relevant documents. The taxation authorities shall, on the same date on which the application is received, issue the tax registration certificate.

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

The scope and measures for tax registration by taxpayers other than those specified in Paragraph 1 of this Article and for registration of tax withholding by withholding agents will be formulated by the State Council.

Article 16 In case of changes in tax registration of a taxpayer engaged in production and/or business operations, the taxpayer shall, within 30 days from the date on which the registration change formalities are completed with the administrative department for industry & commerce or before applying to the administrative department for industry & commerce for cancellation of tax registration, apply to the taxation authorities for registration change or cancellation of tax registration by presenting the relevant documents.

Article 17 Any taxpayer engaged in production and/or business operations shall, in accordance with applicable requirements of the State and by presenting the tax registration certificate, open a basic deposit account and other deposit accounts with banks or other financial entities and shall report all the account numbers to the taxation authorities.

The banks and other financial entities shall record in the accounts of the taxpayers engaged in production and/ or business operations the number of their tax registration certificate, and record in the tax registration certificate the account numbers of the taxpayers engaged in production and/ or business operations.

Where the taxation authorities, in accordance with law, inquire about the accounts opened by a taxpayer engaged in production and/or business operations, the banks or other financial entities concerned shall provide assistance.

Article 18 Taxpayers shall use the tax registration certificate in accordance with applicable requirements of the competent department in charge of taxation under the State Council. No tax registration certificate may be lent, altered, damaged, traded or forged.

Section 2 Administration of accounting books and vouchers

Article 19 Taxpayers and withholding agents shall, pursuant to the relevant laws, administrative regulations and regulations of the competent departments for finance and taxation under the State Council, set accounting books, keep accounts on the basis of lawful 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 and/or business operations shall be filed with the taxation authorities.

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

Article 21 The taxation authorities are the competent departments in charge of invoices responsible for the control and supervision over printing, purchasing, issuing, obtaining, keeping and handing in for cancellation of invoices.

When purchasing or selling commodities, providing or receiving business services or engaging in other business activities, entities and individuals shall issue, use or obtain invoices as required.

The measures for the administration of invoices will be formulated by the State Council.

Article 22 The special invoices for value-added tax shall be printed by enterprises designated by the competent department for taxation under the State Council; other invoices shall, pursuant to the regulations of the competent department for taxation under the State Council, be printed by the enterprises designated respectively by the state taxation bureaus or local taxation bureaus of the provinces, autonomous regions or the centrally-administered municipalities.

No enterprise other than those designated by the taxation authorities specified in the preceding paragraph may print invoices.

Article 23 The State, according to the needs of the administration of tax collection, actively promotes the use of tax-control devices. Taxpayers shall, in accordance with applicable regulations, install and use tax-control devices, and shall not damage, destroy or alter such devices without authorization.

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

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

Section 3 Tax declaration

Article 25 Taxpayers shall, within the specified time limit and according to the contents of tax declaration as prescribed by the laws or administrative regulations, or as determined by the taxation authorities in accordance with the laws or administrative regulations, truthfully complete the formalities for tax declaration and submit tax returns, financial and accounting statements as well as other relevant documents on tax payments as required by the taxation authorities according to actual needs.

Withholding agents shall, within the specified time limit and according to the contents of tax declaration as prescribed by the laws or administrative regulations, or as determined by the taxation authorities in accordance with the laws or administrative regulations, submit statements on taxes withheld and remitted, or collected and remitted as well as other relevant documents as required by the taxation authorities according to actual needs in a truthful manner.

Article 26 Taxpayers and withholding agents may directly go to the taxation authorities to complete the formalities for tax declaration or submit statements on taxes withheld and remitted , or collected and remitted, or, in accordance with regulations, handle the declaration or submission matters mentioned above by mail, electronic data transmission or other means.

Article 27 Where a taxpayer or a withholding agent is unable to complete the formalities for tax declaration or submit statements on the taxes withheld and remitted, or collected and remitted within the specified time limit, the declaration may be postponed upon examination and approval by the taxation authorities.

In the event that a taxpayer or withholding agent is permitted to handle the above declaration or submission matters with delay, the taxpayer or withholding agent shall, within the specified time limit for tax payment, prepay the tax on the basis of the amount of the tax actually paid f or the amount determined by the taxation authorities upon examination or during the previous period, and settle the tax payment within the extended time limit.

Chapter 3 Tax Collection

Article 28 The taxation authorities shall collect taxes in accordance with applicable requirements of the laws or administrative regulations and shall not, in violation of such requirements, impose, cease to collect, overcollect, undercollect, collect in advance, postpone the collection of, or apportion taxes.

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

Article 29 No entity or individual other than the taxation authorities, taxation officials as well as entities and individuals entrusted by the taxation authorities pursuant to applicable laws and administrative regulations may engage in tax collection activities.

Article 30 Withholding agents shall perform their obligations of withholding or collecting taxes in accordance with the provisions of the laws or administrative regulations. No taxation authorities may request the entities or individuals that are not obligated to withhold or collect taxes as prescribed by laws or administrative regulations to perform such obligations.

When a withholding agent performs its obligations of withholding or collecting taxes in accordance with law, no taxpayer may refuse to pay taxes thereto. Where a taxpayer refuses to do so, the withholding agent shall promptly report the matter to the taxation authorities for handling.

The taxation authorities shall, in accordance with relevant regulations, pay to withholding agents service fees for withholding or collecting taxes.

Article 31 A taxpayer or withholding agent shall pay or deliver tax payments in compliance within the time limit specified by laws or administrative regulations, or as determined by taxation authorities in accordance with laws or administrative regulations.

Where a taxpayer is unable to pay taxes within the prescribed time limit due to special difficulties, the taxpayer may, upon approval by the State tax bureau or the local tax bureau of a province, autonomous region or centrally-administered municipality, defer the payment of taxes for a maximum period of three months.

Article 32 Where a taxpayer fails to pay taxes or a withholding agent fails to remit tax payments within the specified time limit, the taxation authorities shall, in addition to ordering the taxpayer or withholding agent to pay or remit the tax within the specified time limit, impose a penalty for late payment on a daily basis at the rate of 0.05% of the amount of tax in arrears, from the date the tax payment is defaulted.

Article 33 A taxpayer may, in accordance with laws or administrative regulations, apply for tax reduction or exemption.

All decisions on tax reduction or exemption made in violation of laws or administrative regulations by the local people's governments at all levels, the competent departments under the said people's governments, or by entities or individuals shall be null and void. No taxation authorities may implement such decisions, and they shall instead report the matter to the higher level taxation authorities.

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

Article 35 If a taxpayer comes under one of the following circumstances, the taxation authorities have the power to assess the tax amount payable:

(1) Where the setting of accounting books is not required in accordance with the provisions of laws and administrative regulations;

(2) The accounting books are not set as required by the provisions of laws and administrative regulations;

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

(4) Where accounting books are set, but the accounts are in a mess 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 taxes arises, the taxpayer fails to complete the formalities for tax declaration within the specified time limit and, after being ordered by taxation authorities to make tax declaration within the specified time limit, still fails to do so upon expiration of the specified time limit; and

(6) Where the basis for assessing tax declared by the taxpayer is obviously on the low side and without justified reasons.

The specific procedure and measures for the taxation authorities to determine the tax amount payable will be formulated by the competent department for taxation under the State Council.

Article 36 The payment or receipt of money or charges in business transactions between an enterprise, or the establishment or site engaged in production or business operations which is set up by a foreign enterprise in China, and its affiliated 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 the taxable revenue or income, the taxation authorities have the power to make reasonable adjustments.

Article 37 Where a taxpayer engaged in production or business operations or a taxpayer temporarily engaged in business operations fails to complete the formalities for tax registration in accordance with regulations, the taxation authorities shall determine the tax amount payable by the taxpayer and order the taxpayer to make payments; if the taxpayer fails to do so, the taxation authorities may attach the commodities or goods valued equivalent to the tax amount payable; if the taxpayer pays the taxes payable after the attachment, the taxation authorities shall immediately cancel the attachment and return the commodities or goods attached; if the taxpayer still fails to pay the taxes payable after the attachment, the commodities or goods attached shall, upon approval of the director of the taxation bureau (or sub-bureau) at or above the county level, be auctioned or disposed of in accordance with law and the proceeds therefrom shall be used to offset the taxes payable.

Article 38 Where the taxation authorities have grounds to believe that a taxpayer engaged in production or business operations commits an act of tax evasion, the taxation authorities may, prior to the specified date of tax payment, order the taxpayer to pay the taxes payable within the specified time limit. If, within the specified time limit, the taxation authorities discover evident signs that the taxpayer is transferring or concealing the taxable commodities, goods or other property, or taxable income, the taxation authorities may order the taxpayer to provide a guaranty for tax payment. If the taxpayer is unable to do so, the taxation authorities may, upon approval of the director of the taxation bureau (or sub-bureau) at or above the county level, adopt the following tax preservation measures:

(1) to notify in writing the bank or any other financial institution with which the taxpayer has opened an account to freeze the taxpayer's deposits valued equivalent to the taxes payable; and

(2) To attach or seal up the taxpayer's commodities, goods or other property valued equivalent to the taxes payable.

Where the taxpayer makes the tax payment within the time limit specified in the preceding paragraph, the taxation authorities shall immediately cancel the tax preservative measures. Where the taxpayer fails to do so upon the expiration of the specified time, the taxation authorities may, upon approval of the director of the tax bureau (or sub-bureau) at or above the county level, notify in writing the bank or any other financial institution with which the taxpayer has opened an account to withhold and remit the taxes payable from the taxpayer's frozen deposits, or, in accordance with law, auction or dispose of the commodities, goods or other property attached or sealed up and use the proceeds therefrom to offset the taxes 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 subjected to the tax preservation measures.

Article 39 Where a taxpayer makes the tax payment within the specified time limit but the taxation authorities fail to immediately cancel the tax preservation measures, therefore causing losses to the lawful interests of the taxpayer, the taxation authorities 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 specified time limit, or a tax payment guarantor fails to pay the guaranteed amount of tax within the specified time limit, the taxation authorities will order it to pay the tax within a specified time limit, failing which the taxation authorities may, upon approval of the director of the taxation bureau (or sub-bureau) at or above the county level, adopt the following compulsory enforcement measures:

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

(2) To attach, seal up or, in accordance with law, auction or dispose of the commodities, goods or other property of the taxpayer, withholding agent or tax payment guarantor, valued equivalent to the taxes payable, and to use the proceeds therefrom to offset the taxes payable.

When executing the compulsory enforcement measures, the taxation authorities shall also apply the compulsory enforcement measures to the penalty for payment which is not paid 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 subjected to the compulsory enforcement measures.

Article 41 No entity or individual other than the statutory taxation authorities may exercise the power to adopt tax preservative measures or compulsory enforcement measures provided for in Articles 37, 38 and 40 of this Law

Article 42 The taxation authorities shall adopt tax preservative measures or compulsory enforcement measures in compliance with the authorities and procedures prescribed by law, and shall not seal up or attach any housing and articles for use which are necessary for the daily lives of the taxpayer itself and the family members it supports.

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

Article 44 Any taxpayer who defaults on tax payment or its legal representative needs to leave China shall pay the taxes payable and the penalty for late payment, or provide a guaranty to, the taxation authorities before leaving China. If neither the tax amount payable and the penalties for late payment are paid nor a guaranty is provided, the taxation authorities may notify the exit administration to prevent the taxpayer or its legal representative from leaving China.

Article 45 Taxes collected by the taxation authorities shall have precedence over unsecured claims, except as otherwise provided for by law; where tax is defaulted before the taxpayer mortgages or pledges its property or before the taxpayer's property is liened, the taxes shall have the precedence over the exercise of the right of mortgage, pledge or lien.

In the event that a taxpayer defaults on tax payment and in the meanwhile receives administrative sanctions such as fines and confiscation of illegal earnings pursuant to decisions made by the administrative agencies, the taxes shall have precedence over the fines and confiscation of illegal earnings.

The taxation authorities shall announce the tax payments defaulted by taxpayers regularly.

Article 46 In the event that a taxpayer defaults on tax payment and mortgages or pledges its property, the taxpayer shall explain to the mortgagee or pledgee about its default on tax payment. The mortgagee or pledgee may request the taxation authorities to provide information about the default.

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

Article 48 In case of merger or division, the taxpayer shall report to the taxation authorities and pay off the taxes payable in accordance with law. If the taxpayer fails to pay off the tax payable at the time of merger, the new taxpayer after the merger shall continue to fulfill the duty to pay taxes; if the taxpayer fails to pay off the taxes payable upon division, the new taxpayer after the division shall bear joint and several liabilities for the unfulfilled duty.

Article 49 Any taxpayer who defaults on payment of a considerable amount of tax shall, before disposing of its real estate or large sum fixed assets, report to the taxation authorities.

Article 50 In the event that a taxpayer who defaults on tax payment fails to exercise its natural creditor's rights, or waives such rights, or transfers its property gratuitously or at a low price obviously unreasonable, which the transferee is aware of, therefore causing losses to tax revenues of the State, the taxation authorities may, in accordance with the provisions in Articles 73 and 74 of the Contract Law, exercise the rights of subrogation and rescission.

The exercise the rights of subrogation and rescission in accordance with the provisions in the preceding paragraph by the taxation authorities shall not release the taxpayer who defaults on tax payment from the tax payment obligations and the legal liabilities that should be borne.

Article 51 Where the taxation authorities discover that a taxpayer makes a tax payment in excess of the amount of tax payable, the taxation authorities shall immediately refund the excess payment; where a taxpayer discovers the same, the taxpayer may, within three years from the date the payment is made, claim from the taxation authorities a refund of the excess payment, plus the interests accrued according to the bank interest rates at the time, and the taxation authorities 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 in relevant laws and administrative regulations.

Article 52 Where a taxpayer or withholding agent fails to pay or underpays taxes for reasons attributable to the taxation authorities, the latter may, within three years, require the taxpayer or withholding agent to pay the tax in arrears without, however, the imposition of any penalty for late payment.

Where a taxpayer or withholding agent fails to pay or underpays taxes owing to its own miscalculation or other faults, the taxation authorities may, within three years, recover the taxes in arrears and the penalties for late payment; under special circumstances, the time limit for recovering the taxes in arrears may be extended to five years.

Where a taxpayer evades, refuses to pay or practises fraud in tax payment and the taxation authorities recover the collection of the unpaid or underpaid tax, the penalties for late payment, or the tax payment defrauded on, the latter shall not be restricted by the time limit prescribed in the preceding paragraph.

Article 53 The State and local tax bureaus shall, in conformity with their respective areas of administration for tax collection and the levels of budgeted tax for the State Treasury prescribed by the State, turn over the collected taxes to the State Treasury.

Where, in accordance with law, the auditing or finance authorities identify any violation of law on tax collection, the taxation authorities shall, based on the decisions or written suggestions of the related authorities and in accordance with law, turn over the taxes and penalties for late payment collected to the State Treasury in conformity with the levels of budgeted tax for the State Treasury, and provide the related authorities with feedback on the results without delay.

Chapter 4 Tax Inspection

Article 54 The taxation authorities have the powers to conduct the following tax inspections:

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

(2) to inspect a taxpayer's taxable commodities, goods or other property at the taxpayer's premises where production or business operations are conducted and places where goods are stored; to inspect 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 withholding agent to furnish documents, certifying documents and materials pertaining to the payment of tax or the amount of tax withheld and remitted or collected and remitted;

(4) to inquire a taxpayer or 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 inspect, at railway stations, docks, airports, postal enterprises and their branches, the supporting documents, vouchers and materials pertaining to the taxable commodities, goods or other property consigned or mailed by a taxpayer; and

(6) Upon approval of the director of the tax bureau (or sub-bureau) at or above the county level and by presenting the permit for deposit account inspection in the national unified format, to inquire about the deposit accounts that a taxpayer engaged in production or business operations or a withholding agent has opened with a bank or any other financial institution. Upon approval of the director of the tax bureau (sub-bureau) at or above the level of the city with districts or the autonomous prefecture, inquire about the savings a suspect involved in a case. No information obtained through inquiry by the taxation authorities may be used for purposes other than tax collection.

Article 55 When the taxation authorities, in accordance with law, conduct tax inspection of a taxpayer engaged in production or business operations in respect of the tax payment made during earlier tax periods and discover the taxpayer's evasion of the obligation to pay taxes and evident signs of transfer or concealment of taxable commodities, goods or other property or incomes, the taxation authorities may adopt tax preservative measures or compulsory enforcement measures in conformity with the powers vested by the Law.

Article 56 A taxpayer or withholding agent must accept tax inspection conducted by the taxation authorities in accordance with law, report the particulars truthfully and provide relevant documents, and may not refuse to accept such inspection or conceal any facts.

Article 57 When conducting tax inspection in accordance with law, the taxation authorities have the power to inquire the 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 the relevant materials and certifying documents to the taxation authorities.

Article 58 When investigating a case involving violation of laws or regulations on tax collection, the taxation authorities may take notes and make tape-recordings, video-recordings, photographings and duplications of the particulars and documents pertaining to the case.

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

Chapter 5 Legal Liability

Article 60 Where a taxpayer commits one of the following acts, the taxpayer shall be ordered by the taxation authorities to rectify within the specified time limit and may be fined not more than 2,000 yuan; if the offenses are serious, the taxpayer may be fined not less than 2, 000 yuan but not more than 10, 000 yuan:

(1) Fails to apply for tax registration or for change or cancellation of tax registration within the prescribed time limit;

(2) Fails to set and/or keep the accounting books, or keep the vouchers for the accounts and the relevant documents in accordance with regulations;

(3) Fails to submit the financial and accounting systems or the financial and accounting procedures, the accounting software to the taxation authorities for reference in accordance with regulations;

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

(5) Fails to install or use tax-control devices in accordance with regulations, damages or destroys or alters such devices without authorization.

Where a taxpayer fails to go through the formalities for tax registration, the taxation authorities shall order the taxpayer to rectify within the specified time; if the taxpayer still fails to rectify upon expiry of the specified time limit, the administrative department for industry and commerce shall, upon proposal and request of the taxation authorities, revoke the business license of the taxpayer.

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

Article 61 Where a withholding agent fails to create and keep the accounting books for the tax withheld and remitted, or collected and remitted, or keeps the vouchers for the accounts and the relevant documents regarding the tax withheld and remitted, or collected and remitted, in accordance with relevant regulations, the withholding agent shall be ordered by the taxation authorities to rectify within the specified time and may be fined not more than 2,000 yuan; if the offenses are serious, the withholding agent shall be fined not less than 2,000 yuan but not more than 5,000 yuan.

Article 62 Where, within the specified time limit, a taxpayer fails to go through the formalities for tax declaration and submit information on tax payment or a withholding agent fails to submit to the taxation authorities statements on taxes withheld and remitted, or collected and remitted and other relevant documents, the taxpayer or withholding agent shall be ordered by the taxation authorities to rectify within the specified time and may be fined not more than 2,000 yuan; if the offenses are serious, the taxpayer or withholding agent 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 taxation authorities to make tax declaration, refuses to do so or makes false tax declaration, or fails to pay or underpays the amount of tax payable. Where a taxpayer evades tax, the taxation authorities shall recover the payment of the amount of tax the taxpayer fails to pay or underpays and the penalties for late payment, and the taxpayer shall also be fined not less than 50 percent but not more than five times the amount of tax the taxpayer fails to pay or underpays; if a crime is constituted, the taxpayer shall be investigated for criminal liability in accordance with law.

Where a withholding agent fails to pay, or underpays the tax withheld or collected through means mentioned in the preceding paragraph, the taxation authorities shall recover the payment of the amount of tax the taxpayer or withholding agent fails to pay or underpays and the penalties for late payment, and the taxpayer or withholding agent shall also 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, the taxpayer or withholding agent shall be investigated for criminal liability in accordance with law.

Article 64 Where a taxpayer or withholding agent fabricates the basis on which tax is assessed, the taxpayer or withholding agent shall be ordered by the taxation authorities to rectify within the specified time and shall also be fined not more than 50, 000 yuan.

Where a taxpayer fails to make tax declaration, or fails to pay or underpays the tax payable, the taxation authorities shall recover the payment of the amount of tax the taxpayer fails to pay or underpays and the penalties for late payment, and the taxpayer shall also 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 fails to pay the tax payable, by means of transferring or concealing the property, prevents the taxation authorities from recovering the payment of the tax in arrears, the taxation authorities shall recover the payment of the tax and the penalties for late payment and shall also give the person a fine of not less than 50 percent but not more than five times the amount of tax in arrears; if a crime is constituted, the person shall be investigated for criminal liability in accordance with law.

Article 66 Where a person, by making false export declaration or through other means, receives export tax rebate from the State, the taxation authorities shall recover the export taxes refunded, and the person shall also be fined not less than the amount of the refund taxes but not more than five times that amount; if a crime is constituted, the person shall be investigated for criminal liability in accordance with law.

Where a person receives export tax rebate from the State through deception, the taxation authorities may, within the specified time limit, suspend export tax rebate for the person.

Article 67 Refusal to pay taxes means refusing to pay taxes by resort to violence or threats. In such a case, the taxation authorities shall, in addition to recovering the payment of the amount of tax a person refuses to pay and the penalties for late payment, conduct investigation for criminal liability in accordance with law. If the offenses are not serious and no crime is constituted, the taxation authorities shall recover the payment of the amount of tax the person refuses to pay and the penalties for late payment and shall also give the person a fine of not less than the amount of the tax the person refuses to pay but not more than five times that amount.

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

Article 69 Where a withholding agent fails to withhold or collect the amount of tax which should be withheld or collected, the taxation authorities shall recover the payment of the said amount, and give 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 to undergo or, by other means, hinders inspection by the taxation authorities, the taxpayer or withholding agent shall be ordered by the taxation authorities to rectify and may be fined not more than 10, 000 yuan; if the offenses are serious, the taxpayer or withholding agent shall be fined not less than 10, 000 yuan but not more than 50, 000 yuan.

Article 71 Where a person, in violation of the provisions in Article 22 of this Law, illegally prints invoices, the taxation authorities shall destroy the invoices illegally printed, confiscate the illegal gains and tools for criminal purposes and give the person a fine of not less than 10, 000 yuan but not more than 50, 000 yuan; if a crime is constituted, the person shall be investigated for criminal liability in accordance with 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 on tax collection and refuses to accept the sanctions given by the taxation authorities, the taxation authorities may confiscate the invoices or discontinue selling invoices to it.

Article 73 Where a bank or other financial institution with which a taxpayer or a withholding agent has opened deposit accounts refuses to accept the taxation authorities' inspection of the deposit accounts of the said taxpayer or withholding agent in accordance with law, or refuses to execute the decision made by the taxation authorities on freezing the deposits or withholding the tax, or, after receiving the written notice of the taxation authorities, assists the taxpayer or withholding agent in transferring the deposits, therefore causing the loss of taxes, the bank or other financial institution shall be fined by the taxation authorities not less than 100,000 yuan but not more than 500,000, and the persons that are directly in charge and the other directly liable persons shall be fined not less than 1,000 yuan but not more than 10,000 yuan.

Article 74 Any administrative sanction specified under the Law may be decided by the taxation stations if the amount of the fine is less than 2000 yuan.

Article 75 The taxation and judicial authorities shall, in conformity with the levels of budgeted tax for the State Treasury, turn over all the revenues from tax-related fines and confiscations to the State Treasury.

Article 76 Any taxation authorities that, in violation of regulations and without authorization, alters the administrative areas for tax collection and the levels of budgeted tax for the State Treasury shall be ordered to rectify within the specified time limit, and the persons that are directly in charge and the other directly liable persons shall, in accordance with law, be given administrative sanctions such as demotion or dismissal from office.

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

Where a taxation official fails to refer a case that should be referred to the judicial authorities to the judicial authorities for investigation for criminal liability by engaging in malpractice for private gains, the taxation official shall be investigated for criminal liability by law if the offense is serious.

Article 78 Any person that collects tax without authorization by the taxation authorities by law shall be ordered to return the money and things of value collected and be given administrative sanctions or penalties by law; where losses are caused to other people's lawful rights or interests, the person shall be liable for compensation in accordance with law; if a crime is constituted, the person shall be investigated for criminal liability in accordance with law.

Article 79 Where the tax authority or tax official seals up or attaches a taxpayer's housing and articles of use which are necessary for the daily lives of the taxpayer and the family members it supports, the taxation authorities or taxation official shall be ordered to return the said housing and articles for use and be given administrative sanctions by law; if a crime is constituted, the taxation authorities or taxation official shall be investigated for criminal liability in accordance with law.

Article 80 Where a tax official colludes with the taxpayers or withholding agents, instigates or assists them in committing an offense against the provisions in Article 63, 65 or 66 of this Law, the tax official shall be investigated for criminal liability in accordance with law if a crime is constituted; if no crime is constituted, the taxation official shall be given administrative sanctions in accordance with law.

Article 81 Where a tax official, by taking advantage of the post, accepts or solicits money or things of value from taxpayers or withholding agents, or seeks other illegal interests, the taxation official shall be investigated for criminal liability in accordance with law if a crime is constituted; if no crime is constituted, the taxation official shall be given administrative sanctions in accordance with law.

Article 82 Where a tax official is engaged in malpractices for privates gain, neglects the duty, fails to collect or under-collects the tax that should be collected, thus causing serious losses to State revenue, the taxation official shall be investigated for criminal liability in accordance with law if a crime is constituted; if no crime is constituted, the taxation official shall be given administrative sanctions in accordance with law.

Any taxation official who abusing the power to deliberately create difficulties for taxpayers or withholding agents shall be transferred from the post for tax collection and be given administrative sanctions by law.

Where a tax official retaliates against taxpayers or withholding agents who complain about or blow whistle on violations of the laws or rules of discipline on tax collection, or any other whistle blowers, the taxation official shall be given administrative sanctions in accordance with law; if a crime is constituted, the taxation official shall be investigated for criminal liability in accordance with law.

Where a tax official, in violation of the provisions of laws and/or administrative regulations, deliberately over- or under-assess the agricultural yield taxable, thus resulting in over- or under-collection of tax, infringing upon the farmers' lawful rights and interests or undermining the interests of the State , the taxation official shall be investigated for criminal liability in accordance with law if a crime is constituted; if no crime is constituted, the taxation official shall be given administrative sanctions in accordance with law.

Article 83 In case of early collection, delayed collection or apportionment of taxes by the taxation authorities in violation of the laws and/or administrative regulations, the higher level authority or administrative supervision authority shall order it to take corrective measures, and the persons that are directly in charge and other directly liable persons shall be given administrative sanctions by law.

Article 84 Where decisions regarding the imposition or cessation of tax, tax reduction, tax exemption, refund of tax or payment of tax underpaid, or other decisions contravening the laws or administrative regulations on tax collection are made without authorization and in violation of the provisions of laws or 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, the amount of tax that should not have been collected shall be refunded, and the persons that are directly in charge and the other persons who are directly liable shall be prosecuted for administrative liability by the higher level authorities; if a crime is constituted, investigation for criminal liability hall be conducted by law

Article 85 In case of failure of any taxation official to withdraw therefrom in collecting taxes, investigating or dealing with cases involving violation of taxation laws in accordance with the Law, the persons that are directly in charge and other directly liable persons shall be given administrative sanctions by law.

Article 86 In case that any violation of the tax-related laws and/or administrative regulations that should be given administrative sanctions is not identified within 5 years, no administrative sanctions shall be given.

Article 87 In case of failure to keep the taxpayer, withholding agent or reporter in confidence in accordance with the Law, the persons that are directly in charge and the other directly liable persons shall, in accordance with Law, be given administrative sanctions by their employers or the departments concerned.

Article 88 In case that any dispute arises over taxation between a taxpayer, withholding agent or tax guarantor with the taxation authorities, the taxpayer, withholding agent or tax guarantor must pay or release the tax and penalty for late payment or provide corresponding guarantee in accordance with the tax payment decision made by the taxation authorities before applying for administrative review by law; if dissatisfied with the decision of administrative review, the taxpayer, withholding agent or tax guarantor may institute a litigation at the people's court.

In the event that the party concerned is dissatisfied with the taxation authorities' penalty decision, mandatory enforcement measures or tax preservative measures, it may apply for administrative review or institute litigation at the people's court by law.

In the event that the party concerned neither applies for administrative review of the penalty decision made by the taxation authorities in a timely manner, nor institutes a litigation at the people's court or refuses to implement the decision, the taxation authorities that makes the penalty decision may, in accordance with Article 40 of the Law, take enforcement measures or apply to the people's court for enforcement.

Chapter 6 Supplementary Provisions

Article 89 Taxpayers and withholding agents may entrust the tax agents to deal with the tax- related matters on their behalf.

Article 90 The specific measures for the administration of collection of cultivated land use tax, deed tax, agricultural tax and animal husbandry tax shall be formulated by the State Council separately.

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

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

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

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

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