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

(Adopted at the 27th Meeting of the Standing Committee of the
Seventh National People’s Congress on September 4, 1992; amended in
accordance with the Decision on Amending the Law of the People’s
Republic of China on the Administration of Tax Collection made by
the Standing Committee of the Eighth National People’s Congress at
its 12th Meeting on February 28, 1995; revised at the 21st Meeting
of the Standing Committee of the Ninth National People’s Congress
on April 28, 2001 and promulgated by Order No.49 of the President
of the People’s Republic of China on April 28, 2001)  

Contents 

Chapter I     General Provisions 

Chapter II    Tax Administration 

Section 1  Tax Registration 

Section 2  Administration of Accounting Books and
Vouchers 

Section 3  Tax Declaration 

Chapter III   Tax Collection 

Chapter IV    Tax Inspection 

Chapter V     Legal Liabilities 

Chapter VI    Supplementary Provisions 

Chapter I  General Provisions 

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

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

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

No units including government departments or individuals may, in
violation of laws or administrative regulations, make decisions
regarding the imposition of tax, the cessation thereof, tax
reduction, tax exemption, refund of tax or payment of delinquent
tax, or any other decision which is in contravention with laws or
administrative regulations governing tax collection. 

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

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

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

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

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

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

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

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

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

Article 7  The tax authorities shall extensively
disseminate the laws and administrative regulations on tax
collection, popularize knowledge about payment of tax and provide,
free of charge, the taxpayers with consultancy relating to payment
of tax. 

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

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

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

With regard to the decisions made by tax authorities, taxpayers
and withholding agents shall have the right to argue their cases
and defend themselves; they shall, in accordance with law, have the
right to apply for administrative reconsideration, take
administrative proceedings, request 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 the level of
their contingents, in order to improve the political and vocational
quality of the tax officials. 

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

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

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

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

Tax authorities at various levels shall conduct inspection to
see that their staff members are implementing laws and
administrative regulations and observe the norms for
incorruptibility and self-discipline.  

Article 11  The functions and responsibilities of the
officials of the tax authorities in charge of tax collection,
management, internal checking or administrative reconsideration
shall be explicitly defined and shall be separate from each other
and mutually restrained. 

Article 12  Any tax official who, in collecting taxes or
investigating and handling cases of violation of laws on tax
collection, is an interested party in relation to the taxpayers or
withholding agents or the said cases, shall withdraw. 
 

Article 13  Every unit or individual shall have the right
to report any violations of the laws and administrative regulations
on tax collection. The authorities receiving such report and the
authorities responsible for investigating and handling the case
shall maintain confidentiality in respect of the accuser. The tax
authorities concerned shall grant the accuser rewards in accordance
with relevant regulations. 

Article 14  The tax authorities mentioned in this Law refer
to the tax bureaus at various levels and their sub-bureaus and tax
stations 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, the branches and the sites engaged
in production or business operations established by enterprises in
other places, industrial and commercial households and 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 obtained, apply to the tax authorities for tax
registration by presenting the relevant documents. The tax
authorities shall, within 30 days from the date the application is
received, issue the tax registration certificate upon examination
and verification of the documents. 

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

The items for 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 any change in the items of tax
registration, he shall, within 30 days from the date he completes
the formalities for such change in the business registration with
the administrative departments for industry and commerce or before
he submits to the said department an application for cancellation
of business registration, apply to the tax authorities for the
change in or cancellation of tax registration by presenting the
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 basic
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
accounts of the taxpayer engaged in production or business
operations the number of his tax registration
certificate. 

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

Article 18  Use of tax registration certificates by
taxpayers shall be governed by the relevant regulations formulated
by the competent department for 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, 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 softwares of
taxpayers engaged in production or business operations shall be
submitted to the tax authorities for the record. 

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 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 tax authorities are the competent
departments in charge of invoices and are responsible for the
control and supervision over printing, purchasing,  writing
out, 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, all
units and individuals shall write out, use or be given
invoices. 

Measures for control of invoices shall 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 said department, be printed by
the enterprises designated respectively by the national taxation
bureaus or local taxation bureaus of provinces, autonomous regions
or municipalities directly under the Central Government. 

No enterprises that are not designated by the taxation bureaus
as provided for in the preceding paragraph may print
invoices.      

Article 23  The State, based on the needs of the
administration of tax collection, positively promotes the wide use
of tax-monitoring devices. Taxpayers shall, in accordance with
regulations, install and use tax-monitoring 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 preserve their accounting
books, vouchers for the accounts, tax payment receipts and other
relevant information 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 information may be forged, altered or,
without authorization, damaged or destroyed.   
 

Section 3 Tax Declaration 

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

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

Article 26  Taxpayers and withholding agents may directly
go to the tax authorities to complete the formalities for tax
declaration or to submit statements on tax 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 taxpayers or withholding agents are
unable to complete the formalities for tax declaration or to submit
statements 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 the tax
authorities. 

Anyone who is permitted to handle the declaration or submission
matters mentioned above within the time limit extended upon
examination shall, within the prescribed time limit for tax
payment, prepay the tax on the basis of the amount of the tax he
actually paid last or the amount determined by the tax authorities
upon examination, and settle the payment within the extended time
limit approved upon examination.  

Chapter III  Tax Collection 

Article 28  The tax authorities shall collect tax in
accordance with the provisions of laws or administrative
regulations. They may not, in violation of such provisions, impose,
cease to collect, overcollect, undercollect, collect in advance,
postpone the collection of, or apportion tax. 

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

Article 29  With the exception of tax authorities, tax
officials and the units and individuals authorized by the tax
authorities in accordance with laws and administrative regulations,
no unit or individual may engage in tax collection. 

Article 30  Withholding agents shall perform their
obligations of withholding or collecting tax in accordance with the
provisions of laws or administrative regulations. With respect to
units or individuals that are not obligated to withhold or collect
tax as prescribed by laws or administrative regulations, no tax
authorities may request them to perform such obligations. 

When withholding agents perform the obligations of withholding
or collecting tax in accordance with law, no taxpayers may refuse
to pay tax to them. Where a taxpayer refuses to do so, the
withholding agent shall promptly report the matter to the tax
authorities for disposition. 

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

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

Where a taxpayer is unable to pay tax within the prescribed time
limit on account of special difficulties, he may, upon approval by
a national tax bureau or a local tax bureau of a province,
autonomous region or municipality directly under the Central
Government, defer the payment of tax 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 authorities shall, in addition to ordering the
taxpayer or withholding agent to pay or remit the tax within a
fixed period of time, impose a surcharge 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 in writing for tax reduction or
tax exemption. 

Applications for tax reduction or tax exemption shall be subject
to examination and approval by the examination and approval
authorities for tax reduction or tax exemption specified by laws or
administrative regulations. All decisions on tax reduction or tax
exemption made in violation of laws or administrative regulations
by the local people’s governments at various levels, the competent
departments under the said people’s governments, or by units or
individuals shall be null and void. No tax authorities may
implement such decisions, and they shall instead report the matter
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, the withholding agents shall, upon request by
taxpayers, issue to them receipts for withholding or collecting
tax. 

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

(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 complete the formalities for tax declaration within the
specified time limit and, after being ordered by tax authorities to
make tax declaration within a fixed period of time, still fails to
do so upon expiration of the time limit; and 

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

The specific procedure and measures for the tax authorities to
determine the amounts of the tax payable shall 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 an establishment or
site engaged in production or business operations which is set up
by a foreign enterprise in 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 the
taxable revenue or income, the tax authorities shall 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 tax authorities shall assess
the amount of tax payable by him and order him to make the payment;
if he fails to do so, the tax authorities may distrain the
commodities or goods of a value equivalent to the amount of tax
payable; if he pays the amount of tax payable after the distraint,
the tax authorities shall immediately remove the distraint and
return the commodities or goods distrained; if he still fails to
pay the amount of tax payable after the distraint, the commodities
or goods distrained shall, upon approval of the commissioner of the
tax bureau (or sub-bureau) at or above the county level, be
auctioned or sold off in accordance with law and the proceeds
therefrom shall be used to offset the amount of tax
payable. 

Article 38  Where the tax authorities have grounds to
believe that a taxpayer engaged in production or business
operations commits an act of tax evasion, they may, prior to the
prescribed date of tax payment, order the taxpayer to pay the tax
payable within a fixed period of time. If, within the fixed period
of time, the tax authorities discover evident signs that the
taxpayer is transferring or concealing the taxable commodities,
goods or other property, or taxable income, they may order the
taxpayer to provide a guaranty for tax payment. If the taxpayer is
unable to do so, the tax authorities may, upon approval of the
commissioner of the tax 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 to the tune equivalent to the amount of tax
payable; and 

(2) to distrain 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 fixed period
of time prescribed in the preceding paragraph, the tax authorities
shall immediately lift the tax preservation measures. Where the
taxpayer fails to do so on the expiration of the fixed period of
time, the tax authorities may, upon approval of the commissioner 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 amount
of tax payable from the taxpayer’s frozen deposits, or, in
accordance with law, auction or sell off the commodities, goods or
other property distrained 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 supports
shall not be subjected to the tax preservation measures.  

Article 39  Where a taxpayer makes the tax payment within
the fixed period of time while the tax authorities fail to
immediately lift the tax preservation measures, thus causing losses
to the legitimate interests of the taxpayer, the tax 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 prescribed time limit, or a tax payment guarantor
fails to pay the guaranteed amount of tax within the prescribed
time limit, the tax authorities shall order him to pay the tax
within a fixed period of time. Where he fails to pay the tax on the
expiration of the time limit, the tax authorities may, upon
approval of the commissioner of the tax 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
amount of tax from his deposits; 

(2) to distrain, seal up or, in accordance with 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, the tax
authorities shall do the same with regard to the surcharge which is
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 supports
shall not be subjected to the compulsory enforcement measures.
 

Article 41  No units or individuals other than the
statutory tax authorities may exercise the power to adopt tax
preservation measures or compulsory enforcement measures provided
for in Articles 37, 38 and 40 of this Law. 

Article 42  The tax authorities shall adopt tax
preservation measures or compulsory enforcement measures in
compliance with the limits of power and procedures prescribed by
law, and they may not seal up or distrain any housing and articles
for use which are necessary for the daily lives of the taxpayer
himself and the family members he supports. 

Article 43  Where the tax authorities abuse their power
and, in violation of law, adopt tax preservation 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 law. 

Article 44  Where the taxpayer, who defaults on tax
payment, or his legal representative needs to leave the territory
of China, either of them shall pay the amount of the tax payable
and the surcharge thereon with, or provide a guaranty to, the tax
authorities before leaving the country. If neither the tax payable
and the surcharge thereon are paid nor a guaranty is provided, the
tax authorities may notify the exit administration to prevent him
from leaving the country. 

Article 45  Tax collection by the tax authorities shall
have precedence over unwarranted claims, except where otherwise
provided for by law; where tax is defaulted before the taxpayer
mortgages or pledges his property or before the taxpayer’s property
is distrained, tax collection shall have the precedence over the
exercise of the right of mortgage, pledge or lien. 

Where a taxpayer defaults on tax payment and is at the same time
fined and his 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. 

The tax authorities shall regularly announce the taxes defaulted
on by taxpayers. 

Article 46  Where a taxpayer defaults on tax payment and
puts his property in mortgage or pledge, he shall explain to the
mortgagee or pledgee about his default on tax payment. The
mortgagee or pledgee may request the tax authorities to provide
information about the default.  

Article 47  The tax authorities shall issue a receipt when
distraining 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 the matter to the tax authorities and
pay off the tax payable in accordance with 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 duty 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 duty.  

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

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

Where the tax authorities exercise the rights of subrogation and
rescission in accordance with the provisions in the preceding
paragraph, the taxpayer who defaults on tax payment shall not be
exempted from fulfilling the duty to pay the tax or from bearing
the legal liability. 

Article 51  Where the tax authorities discover that a
taxpayer makes a tax payment in excess of the amount of tax
payable, they shall immediately refund the excess payment; where a
taxpayer discovers the same, he may, within three years from the
date the payment is made, claim from the tax authorities a refund
of the excess payment, plus the interests calculated according to
the bank interest rates at the time, and the tax 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 tax, for which the responsibility rests with the
tax 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 surcharge thereon.  

Where a taxpayer or withholding agent fails to pay or underpays
tax owing to his own miscalculation or other faults, the tax
authorities may, within three years, pursue the collection of the
tax in arrears and the surcharge thereon; under special
circumstances, the time limit for pursuing the collection of the
tax in arrears may be extended to five years. 

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

Article 53  The national 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 State regulations, turn over the collected tax to the
State Treasury. 

Where, in accordance with law, the auditing or finance
authorities find out any violation of law on tax collection, the
tax authorities shall, based on the decisions or written
suggestions of the related authorities and in accordance with law,
turn over the tax and surcharge thereon collected to the State
Treasury in conformity with the levels of budgeted tax for the
State Treasury, and inform in return the related authorities of the
result without delay. 

Chapter IV Tax Inspection 

Article 54  The tax authorities shall have the power 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 information 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 sites 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 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 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, 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 commissioner of the tax bureau (or
sub-bureau) at or above the county level, 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 commissioner of
the tax bureau (sub-bureau) at or above the level of the city
divided into districts or the autonomous prefecture, inquire about
the savings a suspect involved in a case. No information obtained
through inquiry by the tax authorities may be used for purposes
other than tax collection. 

Article 55  When the tax 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 tax and evident signs of transfer or concealment
of taxable commodities, goods or other property or incomes, they
may adopt tax preservation measures or compulsory enforcement
measures in conformity with the power granted according to this
Law.  

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

Article 57  When the tax authorities conduct tax inspection
in accordance with law, they shall have the power to inquire the
related units 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 units and individuals shall truthfully
provide the relevant information and certifying papers to the tax
authorities. 

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



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

Chapter V Legal Liabilities 

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

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

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

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

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

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

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

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, he shall
be fined not less than 2,000 yuan but not more than 10,000 yuan; if
the circumstances are serious, he 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 preserve accounting books for the tax withheld and remitted or
collected and remitted, or preserve the vouchers for the accounts
and the relevant information regarding the tax withheld and
remitted or collected and remitted, in accordance with relevant
regulations, he shall be ordered by the tax authorities to rectify
within a time limit and may be fined not more than 2,000 yuan; if
the circumstances are serious, he 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 go through the formalities for tax declaration
and submit information on tax payment or a withholding agent fails
to submit to the tax authorities statements on taxes withheld and
remitted or collected and remitted and other relevant information,
he shall be ordered by the tax authorities to rectify within a time
limit and may be fined not more than 2,000 yuan; if the
circumstances are serious, he 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 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 tax
authorities shall pursue the payment of the amount of tax he fails
to pay or underpays and the surcharge thereon, and he shall also be
fined not less than 50 percent but not more than five times the
amount of tax he fails to pay or underpays; if a crime is
constituted, he shall be investigated for criminal responsibility
in accordance with law. 

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

Article 64  Where a taxpayer or withholding agent
fabricates the basis on which tax is assessed, he shall be ordered
by the tax authorities to rectify within a time limit 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 tax authorities shall pursue the
payment of the amount of tax he fails to pay or underpays and the
surcharge thereon, and he shall also be fined not less than 50
percent but not more than five times the amount of tax he fails to
pay or underpays. 

Article 65  Where a taxpayer who fails to pay the tax due
adopts the means of transferring or concealing his property, thus
preventing the tax authorities from pursuing the payment of the tax
in arrears, the tax authorities shall pursue the payment of the tax
and the surcharge thereon and shall also impose on him 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, he shall be investigated
for criminal responsibility in accordance with law. 

Article 66  Where anyone, by making false export
declaration or by other means, defrauds tax refund for exports from
the State, the tax authorities shall pursue the return of the
refund defrauded, and the person shall also be fined not less than
the amount of the refund defrauded but not more than five times
that amount; if a crime is constituted, he shall be investigated
for criminal responsibility in accordance with law. 
 

Where anyone defrauds tax refund for exports from the State, the
tax authorities may, within a specified time limit, suspend tax
refund for his exports. 

Article 67 Refusal to pay tax means refusing to pay tax with
resort to violence or threats. In such a case, the tax authorities
shall, in addition to pursuing the payment of the amount of tax a
person refuses to pay and the surcharge thereon, conduct
investigation for criminal responsibility in accordance with law.
If the circumstances are not serious and no crime is constituted,
the tax authorities shall pursue the payment of the amount of tax
he refuses to pay and the surcharge thereon and shall also impose
on him a fine of  not less than the amount of the tax he
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 prescribed time limit and, after ordered by the
tax authorities to pay or remit within a time limit, still fails to
do so on the expiration of the time limit, the tax authorities may,
in addition to pursuing, 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 he 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 tax authorities shall pursue the payment of the said amount,
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 avoids,
refuses to undergo or, by other means, hinders inspection by the
tax authorities, he shall be ordered by the tax authorities to
rectify and may be fined not more than 10,000 yuan; if the
circumstances are serious, he 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 in
Article 22 of this Law, illegally prints invoices, the tax
authorities shall destroy the invoices illegally printed,
confiscate his unlawful gains and tools for criminal purposes and
impose on him a fine of not less than 10,000 yuan but not more than
50,000 yuan; if a crime is constituted, he shall be investigated
for criminal responsibility 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 be dealt with by the tax authorities, the tax
authorities may confiscate his invoices or discontinue selling
invoices to him. 

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 tax 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 tax authorities on freezing the deposits or withholding the
tax, or, after receiving the written notice of the tax authorities,
assists the taxpayer or withholding agent in transferring his
deposits, thus causing the loss of tax, it shall be fined by the
tax authorities 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 on by the tax stations. 

Article 75  The tax 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  Where the tax authorities that, in violation of
regulations and without authorization, change the administrative
areas for tax collection and the levels of budgeted tax for the
State Treasury shall be ordered to rectify within a time limit, and
the persons who are directly in charge and the other persons who
are directly responsible shall, in accordance with law, be demoted
or dismissed from office, as administrative sanctions. 

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 tax authorities shall
transfer the case to the judicial authorities to be investigated
for criminal responsibility in accordance with law. 

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

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

Article 79  Where the tax authorities or tax officials seal
up or distrain a taxpayer’s housing  and articles of use which
are necessary for the daily lives of the taxpayer himself and the
family members he supports, they shall be ordered to return the
said housing and articles for use and, in accordance with law, be
given administrative sanctions; if a crime is constituted, they
shall be investigated for criminal responsibility in accordance
with 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 law; if
no crime is constituted, they shall be given administrative
sanctions in accordance with law.  

Article 81  Where tax officials, by taking advantage of
their positions, accept or extort money or things of value 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 law; if no crime is
constituted, they shall be given administrative sanctions in
accordance with law. 

Article 82  Where tax officials, engaging in malpractices
for personal gain or neglecting their duty, 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 law; if
no crime is constituted, they shall be given administrative
sanctions in accordance with law. 

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

Where tax officials retaliate against taxpayers or withholding
agents who complain of or report violations of the laws or rules of
discipline on tax collection, or any other accuser, they shall be
given administrative sanctions in accordance with law; if a crime
is constituted, they shall be investigated for criminal
responsibility in accordance with law. 

Where tax officials, in violation of the provisions of laws or
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 law; if no crime is constituted, they shall be
given administrative sanctions in accordance with law. 

Article 83  Where, in violation of the provisions of laws
or administrative regulations, tax are collected in advance, the
collection is postponed, or taxes are apportioned, the authorities
at a higher level or the administrative supervisory authorities
shall order its 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 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 who are directly in charge and the other
persons who are directly responsible shall be pursued for
administrative liability by the authorities at a higher level; if a
crime is constituted, investigation for criminal responsibility
shall be conducted in accordance with law. 

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

Article 86  If any violation of the laws or administrative
regulations on tax collection which deserves administrative
penalties is undetected for five years, no administrative penalties
shall be imposed any longer. 

Article 87  Where tax officials fail to keep
confidentiality for the taxpayers, withholding agents or accusers,
the persons who are directly in charge and the other persons who
are directly responsible shall, in accordance with law, be given
administrative sanctions by the units they belong to or the units
concerned.   

Article 88  Where a tax dispute arises between a taxpayer,
withholding agent or tax payment guarantor and the tax authorities,
the former shall pay or remit the amount of tax payable and the
surcharge thereon, or provide the necessary guaranty in accordance
with the decisions made by the tax authorities on tax collection,
before he may apply for administrative reconsideration in
accordance with law; if he is not satisfied with the decision made
after reconsideration, he may bring a lawsuit in the People’s Court
in accordance with law. 

Where a party is not satisfied with the penalty decision made or
the compulsory enforcement measures or tax preservation measures
adopted by the tax authorities, he may, in accordance with law,
apply for administrative reconsideration or bring a lawsuit in the
People’s Court in accordance with law. 

Where, on the expiration of the time limit, the party fails to
apply for administrative reconsideration of the penalty decision
made by the tax authorities, nor does he bring a lawsuit in the
People’s Court or comply with the decision, the tax authorities
that make 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 withholding agent may entrust a
tax agent with the handling of tax affairs on his behalf. 

Article 90  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 tax authorities
shall be exercised 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 differing from those of this Law, the
provisions of such treaties or agreements shall apply. 

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 the latter shall apply. 

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 go into effect as of May 1,
2001.

( Legislative Affairs Commission of the Standing Committee of
the National People’s Congress)