Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Tax Deduction or Exemption (for Trial Implementation)
Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Tax Deduction or Exemption (for Trial Implementation)
Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Tax Deduction or Exemption (for Trial Implementation)
Guo Shui Fa [2005 ]No. 129
August 3, 2005
The state and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and Yangzhou Institute of Continuing Tax Education:
In order to regulate and intensify the administration of tax deduction or exemption, the State Administration of Taxation has formulated the Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Tax Deduction or Exemption (for Trial Implementation) and hereby prints and distributes it to you for implementation.
Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Tax Deduction or Exemption (for Trial Implementation)
Chapter I General Provisions
Article 1 The present Measures are formulated according to the Law of the People's Republic of China on the Administration of Tax Levying (hereinafter referred to as the Law on Tax Collection and Administration) and the Detailed Rules for Implementation thereof and the provisions of the relevant laws, regulations and rules on tax deduction or exemption.
Article 2 The term "tax deduction or exemption" as mentioned in the present Measures refers to the treatment of tax deduction or tax exemption that is granted to a taxpayer according to the laws and regulations on tax collection and the relevant provisions of the state on tax collection (hereinafter referred to as the provisions of tax law). The term "tax deduction" refers to the deduction of some tax amount from the payable tax amount; while "tax exemption" refers to the exemption of the tax amount in a tax category or under a tax item.
Article 3 The tax authorities at all levels shall, according to the principles of legality, openness, impartiality, high-efficiency and facilitation, regulate the administration of tax deduction or exemption.
Article 4 The tax deduction or exemption are classified into the tax deduction or exemption by way of approval and the tax deduction or exemption by way of archival filing. The term "tax deduction or exemption by way of approval " refers to the item of tax deduction or exemption that shall be subject to the examination and approval of the tax authority. The term "tax deduction or exemption by way of archival filing" refers to the item of tax deduction or exemption for which the formalities of examination and approval have been eliminated and which is not subject to the examination and approval of the tax authority.
Article 5 A taxpayer who enjoys the tax deduction or exemption by way of approval shall submit relevant materials and file an application. The tax deduction or exemption thereof is implemented upon the examination and approval and verification of the competent tax authority (hereinafter referred to as the competent tax authority), as is prescribed in the present Measures. Where a taxpayer fails to file an application or fails to pass the examination and approval and verification of the competent tax authority, he may not enjoy any tax deduction or exemption.
A taxpayer that requests for enjoying the tax deduction or exemption by way of archival filing shall file an application for archival filing and, after the tax authority handles the registration and archival filing, the relevant tax deduction or exemption shall be implemented as of the day of registration and archival filing. A taxpayer that fails to go through the archival filing according to the relevant provisions may not enjoy any tax deduction or exemption.
Article 6 For a taxpayer that concurrently engages in activities under the item of tax deduction or exemption as well as item of non-tax-deduction or exemption, the tax amount thereof shall be verified and calculated separately, that is, the tax-computation base for those activities under the item of tax deduction or exemption and the amount to be deducted or exempted shall be separately calculated. Where it cannot be verified and calculated separately, the relevant taxpayer may not enjoy any tax deduction or exemption. Where it cannot be verified and calculated in a clear way, the tax authority shall verify it by reasonable methods.
Article 7 A taxpayer may enjoy the treatment of tax deduction or exemption according to law. For anyone who fails to enjoy the said treatment, which result in his overpayment of taxes, if there is no definite provision so that the refund of the overpaid taxes shall be subject to the examination and approval of the tax authority there is no statutory time limit for filing an application for such refund, the taxpayer may file an application, within the time limit as prescribed in Article 51 of the Law on Tax Collection and Administration, for refunding the overpaid tax amount, but no interest calculated at the bank deposit rates for the corresponding period of time will be available.
Article 8 The organ in charge of the examination and approval of tax deduction or exemption shall be provided for by laws, regulations and rules on tax collection. Anything as prescribed to be subject to the examination and approval of the State Administration of Taxation shall be reported to the State Administration of Taxation by the tax authority of the province, autonomous region, municipality directly under the Central Government or the city under separate state planning. Anything be subject to the examination and approval of the tax authority at or below the provincial level shall be subject to the examination and approval of the tax authority at the provincial level, or the power of examination and approval shall be determined by the tax authority, and, as is the general principle, be granted to the tax authority at the county (district) level where the relevant taxpayer is located. For any item with a large sum of tax to be deducted or exempted or the requirement thereof is complicated, the tax authority of the province, autonomous region, municipality directly under the Central Government or the city under separate state planning shall, according to the principles of efficiency and convenience for the public, supervision and responsibility, allocate the authority of examination and approval in a proper manner.
The tax authorities at all levels shall carry out the examination and approval for tax deduction or exemption according to the prescribed power and procedures and are prohibited from carrying out any examination and approval by overstepping their power or violating the relevant provisions.
Chapter II Application, Report, Examination and Approval, and Implementation of Tax Deduction or Exemption
Article 9 A taxpayer who applies for tax deduction or exemption by way of approval shall, within the tax deduction or exemption term as prescribed by policies, file a written application with the administrative tax authority and report the following materials:
(1) An application report for tax deduction or exemption, clearly indicating the reason, base, scope, time limit, quantity and amount, etc.;
(2) The financial statements and a tax return form;
(3) The certification materials as produced by the relevant departments; and
(4) Any other material as required by the tax authority.
The materials as reported by a taxpayer shall be authentic, accurate and complete, The tax authority shall not require a taxpayer to submit any technical material or any other material that is irrelevant to the tax deduction or exemption item it applies for.
Article 10 A taxpayer may apply to the administrative tax authority for tax deduction or exemption or may directly apply to the competent tax authority.
For any application that is accepted by the administrative tax authority where the relevant taxpayer is located and shall be subject to the examination and approval of the tax authority at a higher level, the administrative tax authority shall, within 10 workdays as of acceptance of the application, directly report it to the tax authority at a higher level that has the power of examination and approval.
Article 11 The tax authority shall, according to the following circumstances, handle the applications for tax deduction or exemption:
(1) Where any tax deduction or exemption item as applied for need not be subject to the examination of the tax authority before implementation, the relevant taxpayer shall be informed of the non-acceptance in a timely manner;
(2) Where any application material regarding tax deduction or exemption is not detailed enough or has any mistake, the relevant taxpayer shall be informed of it and shall be allowed to correct it.
(3) Where any application material regarding tax deduction or exemption is not complete or fails to meet the statutory form, the taxpayer shall be informed of all the content that needs to be supplemented and corrected in a one-off manner within 5 workdays; and
(4) Where the application material regarding tax deduction or exemption is complete and complies with the legal form, or the relevant taxpayer has submitted all the tax deduction or exemption materials that are required to be supplemented or corrected, the application thereof shall be accepted.
Article 12 Where the tax authority accepts or refuses to accept an application for tax deduction or exemption, it shall produce a written certificate affixed with the special seal thereof and indicated with the date as well.
Article 13 The term "examination and approval for tax deduction or exemption" is an examination on the correlation between the materials as provided by the relevant taxpayer and the statutory requirements of tax deduction or exemption. It does not change the responsibility of a taxpayer to file tax returns in a faithful manner.
Where the tax authority needs to carry out an on-the-spot verification to the content of the application materials, it shall designate 2 or more working staff to conduct the on-the-spot verification according to the prescribed procedures and put the verification on record. In case a superior tax authority find itself having a heavy-workload and time-consuming on-the-spot verification regarding tax deduction or exemption, it may entrust the tax authority at the county level where the relevant enterprise is located for the specific organization and implementation.
Article 14 Where the term for tax deduction or exemption exceeds 1 tax year, an one-off examination and approval shall be carried out.
Where the condition for a taxpayer to enjoy the tax deduction or exemption changes, it shall be reported to the tax authority within 15 workdays as of the change.
......