Circular of the State Administration of Taxation on Improving Assessment of Tax Refunds (Exemptions) for Exported Goods
Circular of the State Administration of Taxation on Improving Assessment of Tax Refunds (Exemptions) for Exported Goods
Circular of the State Administration of Taxation on Improving Assessment of Tax Refunds (Exemptions) for Exported Goods
Guo Shui Fa [2007] No. 4
January 20, 2007
To the national tax bureaus of the various provinces, autonomous regions, municipalities directly under the central government, and cities designated in the state plan:
With the goal of strengthening the administration of tax refunds on exports, guarding against and cracking down on the procurement of tax refunds by criminally fraudulent means, and carrying out tax refund (exemption) assessments for exported goods (hereinafter tax refund assessments) in conscientious and thorough manner, this circular on relevant issues is hereby promulgated as follows:
I. Tax refund assessments form a significant portion of the daily administrative work relating to tax refunds on exports, so each region shall fully recognize the importance and necessity of conducting tax refund assessments and diligently strengthen the organizational leadership dedicated to tax refund assessment work; on the basis of local conditions and the sum of pervious experience, a concrete plan for implementation shall be drafted that seamlessly integrates the expansion of tax refund assessments with the strengthening of tax refund assessment administration as well as the implementation of disciplinary systems for tax collection administrators.
II. Tax refund assessment refers to the analysis and appraisal of the tax refund (exemption) situation for goods exported by an export-oriented enterprise within a certain period, carried out by a taxation authority in accordance with the Procedures of State Administration of Taxation for Administration of Tax Collection Assessments (Trial) (Guo Shui Fa [2005] No. 23), which also includes, based on the results of the assessment, determination of the nature of the situation, the amount involved, as well as any further administrative measures that are indicated.
III. Tax refund assessments are the responsibility of the export tax refund administration department internal to the taxation authorities, or personnel in charge of export tax refund administration, and may be conducted in advance of, during, or after the processing of the tax refund (exemption) on exported goods. In light of local conditions, each regional office shall create specialized positions to carry out tax refund assessment and sensibly allocate personnel to fill these posts. The export tax refund administration department shall cooperate closely with other administrative departments, instituting division of labor with individual responsibility and working together to carry out tax refund assessments in an effective manner.
IV. The various regional offices shall make full use of existing export tax refund information and data to set up a tax refund assessment database. The information included in this database should include details such as the values of the assessment indices for export-oriented enterprises, the early warning values, and the results of previous assessments. The database should be integrated into a unified data administration system to facilitate information sharing.
The tax refund assessment indices can be divided into tax refund assessment indices for foreign trade enterprises and the "exemption, deduction, and refund" assessment indicators for manufacturing enterprises. The types of assessments primarily include export increase assessments, export price assessments, assessment of the domestic flow of goods,port of exit assessments, assessments of verified material processing records, proportion of refundable tax assessment, etc. For the specific indices and assessment methods, please refer to the attachments.
The various regional offices shall fix the warning values for the local tax return assessment indices, and may, according to their needs, fix other tax return assessment indices.
V. Tax refund assessment includes the following major tasks: fixing the assessment indices and warning values; determining the target of assessment; carrying out an off-site assessment analysis of said target; based on the results of the analysis, make a judgment as to the nature of the situation and the quantity involved or verify the results of the assessment analysis results by means of direct consultation, written communication, or on-site investigation, and then make a judgment as to the nature of the situation and the quantity involved; take appropriate assessment-related measures based on the results of the judgment; suggest administrative action to the relevant department; provide basic information for taxation macro-analyses or the monitoring of the tax burden of a particular industry.
VI. If an irregularity is uncovered during the process of tax refund assessment, it should be handled according to the following principles:
1. For irregularities that are uncovered in the process of assessment, the facts of the matter shall be determined through means such as written communication, direct consultation, and on-site inspection; for cases where there is no suspicion of tax fraud, tax evasion, or other acts that should be reported to the appropriate investigative department for investigation and prosecution, the export enterprise may be forcefully requested to rectify the situation of their own accord; for cases where administrative sanction is indicated, it shall be applied according to the procedures and authoritative limits prescribed by law.
2. Where irregularities that are uncovered in the process of assessment whose the facts may not be properly determined, or where the export enterprise refuses to rectify the situation of their own accord, or where it is discovered that the actions of the export enterprise may involve tax fraud, tax evasion, or other circumstances that should be transferred to the appropriate investigative department for investigation and prosecution, tax refunds (exemptions) that have not be fully processed shall be suspended; for those that have already been granted, the export enterprise shall, according to the relevant regulations of the tax collection administration law, be instructed to provide a guarantee on or to set aside the tax revenue before the case is transferred the appropriate investigative department for investigation and prosecution.
......
Guo Shui Fa [2007] No. 4
January 20, 2007
To the national tax bureaus of the various provinces, autonomous regions, municipalities directly under the central government, and cities designated in the state plan:
With the goal of strengthening the administration of tax refunds on exports, guarding against and cracking down on the procurement of tax refunds by criminally fraudulent means, and carrying out tax refund (exemption) assessments for exported goods (hereinafter tax refund assessments) in conscientious and thorough manner, this circular on relevant issues is hereby promulgated as follows:
I. Tax refund assessments form a significant portion of the daily administrative work relating to tax refunds on exports, so each region shall fully recognize the importance and necessity of conducting tax refund assessments and diligently strengthen the organizational leadership dedicated to tax refund assessment work; on the basis of local conditions and the sum of pervious experience, a concrete plan for implementation shall be drafted that seamlessly integrates the expansion of tax refund assessments with the strengthening of tax refund assessment administration as well as the implementation of disciplinary systems for tax collection administrators.
II. Tax refund assessment refers to the analysis and appraisal of the tax refund (exemption) situation for goods exported by an export-oriented enterprise within a certain period, carried out by a taxation authority in accordance with the Procedures of State Administration of Taxation for Administration of Tax Collection Assessments (Trial) (Guo Shui Fa [2005] No. 23), which also includes, based on the results of the assessment, determination of the nature of the situation, the amount involved, as well as any further administrative measures that are indicated.
III. Tax refund assessments are the responsibility of the export tax refund administration department internal to the taxation authorities, or personnel in charge of export tax refund administration, and may be conducted in advance of, during, or after the processing of the tax refund (exemption) on exported goods. In light of local conditions, each regional office shall create specialized positions to carry out tax refund assessment and sensibly allocate personnel to fill these posts. The export tax refund administration department shall cooperate closely with other administrative departments, instituting division of labor with individual responsibility and working together to carry out tax refund assessments in an effective manner.
IV. The various regional offices shall make full use of existing export tax refund information and data to set up a tax refund assessment database. The information included in this database should include details such as the values of the assessment indices for export-oriented enterprises, the early warning values, and the results of previous assessments. The database should be integrated into a unified data administration system to facilitate information sharing.
The tax refund assessment indices can be divided into tax refund assessment indices for foreign trade enterprises and the "exemption, deduction, and refund" assessment indicators for manufacturing enterprises. The types of assessments primarily include export increase assessments, export price assessments, assessment of the domestic flow of goods,port of exit assessments, assessments of verified material processing records, proportion of refundable tax assessment, etc. For the specific indices and assessment methods, please refer to the attachments.
The various regional offices shall fix the warning values for the local tax return assessment indices, and may, according to their needs, fix other tax return assessment indices.
V. Tax refund assessment includes the following major tasks: fixing the assessment indices and warning values; determining the target of assessment; carrying out an off-site assessment analysis of said target; based on the results of the analysis, make a judgment as to the nature of the situation and the quantity involved or verify the results of the assessment analysis results by means of direct consultation, written communication, or on-site investigation, and then make a judgment as to the nature of the situation and the quantity involved; take appropriate assessment-related measures based on the results of the judgment; suggest administrative action to the relevant department; provide basic information for taxation macro-analyses or the monitoring of the tax burden of a particular industry.
VI. If an irregularity is uncovered during the process of tax refund assessment, it should be handled according to the following principles:
1. For irregularities that are uncovered in the process of assessment, the facts of the matter shall be determined through means such as written communication, direct consultation, and on-site inspection; for cases where there is no suspicion of tax fraud, tax evasion, or other acts that should be reported to the appropriate investigative department for investigation and prosecution, the export enterprise may be forcefully requested to rectify the situation of their own accord; for cases where administrative sanction is indicated, it shall be applied according to the procedures and authoritative limits prescribed by law.
2. Where irregularities that are uncovered in the process of assessment whose the facts may not be properly determined, or where the export enterprise refuses to rectify the situation of their own accord, or where it is discovered that the actions of the export enterprise may involve tax fraud, tax evasion, or other circumstances that should be transferred to the appropriate investigative department for investigation and prosecution, tax refunds (exemptions) that have not be fully processed shall be suspended; for those that have already been granted, the export enterprise shall, according to the relevant regulations of the tax collection administration law, be instructed to provide a guarantee on or to set aside the tax revenue before the case is transferred the appropriate investigative department for investigation and prosecution.
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