Issue of the Circular of the State Administration of Taxation on the Procedures for Verification and Collection of Enterprise Income Tax (for Trial Implementation)

Circular of the State Administration of Taxation on the Procedures for Verification and Collection of Enterprise Income Tax (for Trial Implementation)

Guo Shui Fa [2008] No. 30

March 6, 2008

National taxation bureaus and local taxation bureaus of provinces, autonomous regions, municipalities directly under the central government and cities specifically designated in the state plan,

In order to strengthen and regulate the verification and collection of enterprise income tax, the State Administration of Taxation has formulated the Procedures for Verification and Collection of Enterprise Income Tax. The Procedures are hereby issued for implementation.

I. The collection of enterprise income tax shall be determined in strict accordance with the prescribed scope and standard. No extension of the scope of verification and collection of enterprise income tax in violation of regulations is allowed. The uniform verification and collection of enterprise income tax in accordance with the size of industries or the scale of enterprises is strictly prohibited.

II. The verification and collection of enterprise income tax shall follow the principles of fairness, impartiality and openness. The payable income tax or taxable income rate shall be verified by categories and accounts in accordance with the characteristics of the industry of taxpayers and factors such as the geographic location, operating scale, income level and profit level of the enterprise to ensure that the burden of income tax of the same or similar enterprises of comparable scale in the same area is in principle similar.

III. The verification and collection of enterprise income tax shall be improved. The work planning and arrangement for verification and collection of enterprise income tax shall provide convenience to taxpayers and comply with the actual circumstances of taxpayers, and the assessment and recognition work shall be completed timely within the prescribed time limit.

IV. The planning of account set-up by taxpayers shall be promoted. Taxation authorities shall actively supervise the account set-up mechanism of taxpayers for verification and collection of enterprise income tax, improve administration and guide taxpayers to move towards the account checking method. In respect of taxpayers that comply with account checking conditions, the collection method shall be timely adjusted and account checking method shall be implemented.

V. The examination of taxpayers who are subject to the verification and collection method shall be strengthened. The degree of examination of taxpayers who are subject to the verification and collection shall be intensified, and the verification and examination of settlement and payment as well as routine levy and administration shall be integrated to rationally determine the annual audit matter and avoid the intentional reduction of tax burden by taxpayers through the verification and collection method.

VI. The State Administration of Taxation and local taxation bureaus shall closely coordinate with one another. They shall jointly carry out the verification and collection of enterprise income tax, determine the taxable income rate of sub-industries, determine the payable income tax of separate entities through negotiation to make sure that the verification of payable income tax and taxable income rate are in principle consistent for taxpayers with basically the same production and operation location, operating scale and scope of operation under the jurisdictions of the State Administration of Taxation and local taxation bureaus.

Appendix: Procedures for Verification and Collection of Enterprise Income Tax (Trial Implementation)

Article 1 These Procedures are formulated in accordance with the Law of the People's Republic of China on Enterprise Income Tax and its implementing regulations, and the Law of the People's Republic of China on the Administration of Tax Levying and its implementing rules in order to strengthen the administration of collection of enterprise income tax, regulate the verification and collection of enterprise income tax, ensure that state tax payment is put into the treasury timely and in full and the lawful rights of taxpayers are protected.

Article 2 These Procedures shall apply to resident enterprise taxpayers.

Article 3 Taxpayers that fall under any of the following circumstances are subject to the verification and collection of enterprise income tax:
1.
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