PROPOSALS SUBMITTED BY THE STATE TAXATION ADMINISTRATION ON ADJUSTING THE SCOPES OF ADMINISTRATION OF TAX COLLECTION BETWEEN THE STATE AND LOCAL TAX AUTHORITIES

Proposals Submitted by the State Taxation Administration on Adjusting the Scopes of Administration of Tax Collection Between the State and Local Tax Authorities

In 1994, the departments of taxation in the whole country were reorganized
into two sets of tax authorities, the state and local tax authorities, between
which the scopes of administration of tax collection were clearly divided up
in accordance with the provisions of the Circular of the General Office of the
State Council on the Transmission of the Proposals Submitted by the State
Taxation Administration Concerning the Establishment of Its Subordinate Tax
Authorities in Each Locality and the Local Tax Authorities promulgated by
No.[1993]87 of the General Office of the State Council. After the split of
institutions, the two sets of tax authorities function in a basically steady
way and have played an important role in ensuring the reform in the systems of
finance and taxation to be made smoothly. Upon the summary of working practice
for over one year, an adjustment is intended to make in the scopes of
administration of tax collection between the state and local tax authorities.
Proposals are detailed in the following:

Taxes on individual businesses shall be collected and controlled by the
state and local tax authorities respectively according to the scopes of
administration divided up under the principle of income distribution. That is,
the value-added tax and the consumption tax shall be collected and controlled
by the state tax authorities and the business tax, the individual income tax
and other types of taxes by the local tax authorities.

For the purposes of strengthening the administration of tax collection,
lowering the cost of tax collection, avoiding overlapped working scopes and
making individual businesses convenient for payment of taxes, the state and
local tax authorities may, upon an agreement through consultation, commission
one another with collection of taxes within their respective scopes of
administration and the commission of collection shall be free from service
charges.

The preceding provisions shall also apply to individual businesses in
trade fair markets.

The value-added tax, the consumption tax and the income tax on foreign
investment enterprises and foreign enterprises shall be collected and
controlled by the state tax authorities and the business tax, the individual
income tax and other types of local taxes by the local tax authorities. The
local tax authorities may commission the collection of taxes to the state tax
authorities.

The state tax authorities shall collect and control income taxes on those
joint venture enterprises or joint stock enterprises which are incorporated by
central and local enterprises or institutions.

The state tax authorities shall collect and control the securities trading
tax (prior to its levy, the stamp tax on securities trading, instead).

The local tax authorities shall collect and control the surcharge for
education with the exception of that paid by railway enterprises, head offices
of banks and insurance companies. To simplify collection procedures, the
collection of the surcharge for education attached to the value-added tax and
the consumption tax may be commissioned to the state tax authorities.

The scopes of administration of collecting other types of industrial and
commercial taxes shall be determined in accordance with the No.[1993]87
document promulgated by the General Office of the State Council.

Our Administration shall separately formulate specified measures to
implement the proposals on adjusting the scopes of administration of tax
collection.

Staff members and property in each of tax authorities shall no longer be
rearranged after the adjustment in the scopes of administration of tax
collection. If it is really necessary to transfer a few number of personnel,
the state tax authorities in the locality and the local tax authorities shall
reach an agreement through consultation.

The adjustment in the scopes of administration of tax collection shall be
implemented as from February 1, 1996.

Category	TAXATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1996-01-24	Effective Date	1996-01-24

Laws of the People's Republic of China

PROPOSALS SUBMITTED BY THE STATE TAXATION ADMINISTRATION ON ADJUSTING THE SCOPES OF ADMINISTRATION OF TAX COLLECTION BETWEEN THE STATE AND LOCAL TAX AUTHORITIES