Laws of the People's Republic of China

State Administration of Taxation

Decree of the State Administration of Taxation of the People's Republic of China

NO.8

Rules on Taxation Administrative Review (interim) , deliberated and adopted at the first executive meeting of the State Administration of Taxation on January 17th, 2004, are hereby promulgated and shall be put in force as of May 1st, 2004.

Xie Xuren, Director of the State Administration of Taxation

February 24th, 2004

Rules for Taxation Administrative Review (interim)

Chapter I General Provisions

Article 1

With a view to preventing and rectifying the violations of laws or specific improper administrative actions of the tax authorities, protecting the legal rights and interests of taxpayers and other interested parties, and ensuring and supervising the tax authorities to lawfully exercise their mandate the current Rules are formulated in accordance with the Law of the People's Republic of China on Administrative Review, the Law of the People's Republic of China on the Administration of Tax Collection and other relevant regulations.

Article 2

Taxpayers and other interested parties who believe their legal rights and interests have been infringed by a specific administrative action of a tax authority, may apply for review to the taxation administrative review authority in accordance with legal procedures. The Rules are applicable to taxation administrative review authorities in accepting the application for review and in making decisions on administrative review.

Article 3

The tax administrative review authority referred to in the Rules (hereinafter referred to as the review authority) are those tax authorities that lawfully investigate and make administrative review decisions on specific administrative actions after receiving applications for review.

Article 4

Agencies of the review authorities in charge of taxation legal affairs (hereinafter referred to as legal affairs agencies) shall shoulder the specific responsibility of administrative review and perform the following duties:

(1)

Accepting the application for administrative review;

(2)

Investigating and searching for evidence from relevant organizations and persons, consulting documents and materials;

(3)

Examining whether a specific administrative action under a review application is lawful and proper and drafting an administrative review decision.

(4)

Handling or transferring examination applications listed in Article 9 of the Rules;

(5)

In accordance with the prescribed jurisdiction and procedures, putting forward proposals for handling actions violating the Administrative Review Law and the Rules;

(6)

Handling matters for responding to administrative lawsuits lodged because of objections to administrative review decisions;

(7)

Examining and supervising the administrative review work of tax authorities at lower levels;

(8)

Handling compensation issues as result of the administrative review cases;

(9)

Collecting statistics, making reports and keeping files for administrative review, lawsuits and compensation cases.

Tax authorities at all levels shall establish sound legal affairs agencies and assign fulltime clerks in charge of administrative review and corresponding lawsuits to ensure smooth progress of the work.

Article 5

In performing the administrative review duties, the review authorities shall fortify the awareness of responsibility and service, establish the concept of rule-based administration, follow the principles of legitimacy, impartiality, transparency, timeliness and convenience for the people, adhere to correcting errors if any, cleave to laws, and ensure the correct implementation of the laws and regulations.

Article 6

If taxpayers and other parties concerned disagree to tax administrative review decisions, they may bring administrative lawsuits to the people's courts in accordance with the Law on Administrative Procedures.

Article 7

Expenses incurred in administrative review and litigation in the tax authorities at all levels shall be covered by administrative budget.

Chapter II Scope of Taxation-related Administrative Review

Article 8

The review authorities shall accept applications for administrative review as a result of objections to any of the following specific administrative actions:

(1)

Tax collection by the tax authorities, including specific administrative actions such as confirming the taxable entities, taxable items, scope of taxation, tax reduction, exemption and refund, applicable tax rate, tax base, intermediate links of taxation, time limit for tax payment and tax collection methods as well as tax collection, imposing fines on tax owed, actions of withholding agents, and tax collection by agents entrusted by tax authorities.

(2)

Measures taken by the tax authorities to guarantee the tax revenue:

(a)

Written notification to banks or other financial institutions to temporarily freeze an account;

(b)

Seizing or detaining commodities, goods or other property.

(3)

Failure to timely withdraw tax revenue guarantee measures by the tax authorities which results in infringement of the legal rights and interests of taxpayers;

(4)

Mandatory enforcement measures taken by the tax authorities:

(a)

Written notifications to banks or other financial organizations to withhold tax payments from deposits of the concerned parties;

(b)

Selling or auctioning the seized or detained commodities, goods or other properties.

(5)

Administrative penalty imposed by the tax authorities:

(a)

fines;

(b)

confiscation of properties and illegal income;

(c)

depriving the right of getting export tax refund.

(6)

The actions of the tax authorities in refusing to lawfully handle a matter or to give a reply:

(a)

Refusing to approve tax reductions and exemptions or export tax refund;

(b)

Refusing to credit the tax;

(c)

Refusing to rebate tax;

(d)

Refusing to issue tax registration certificate or sell invoices;

(e)

Refusing to issue tax payment vouchers and receipts;

(f)

Refusing to identify the normal value-added tax payers;

(g)

Refusing to approve deferred tax declaration, and deferred tax payment.

(7)

The actions of the tax authorities in disqualifying the general VAT payers;

(8)

The actions of the tax authorities in capturing and stopping selling invoices;

(9)

The actions of the tax authorities in ordering the taxpayers to present tax payment guarantees or not to lawfully confirm the validity of their tax payment guarantees.

(10)

The actions of the tax authorities in refusing to lawfully grant awards to tax evasion reporters.

(11)

Decision of the tax authorities of notifying the border exit department to prevent exit of border.

(12)

Other specific administrative actions of the tax authorities.

Article 9

Any taxpayers or other parties concerned believing that the following basis for the specific administrative actions of the tax authorities are illegal may apply to the review authorities for examining these basis when applying for the administrative review of the specific administrative actions:

(1)

The rules of the State Administration of Taxation and other departments of the State Council:

(2)

The rules of the tax authorities at other levels;

(3)

The rules of the local people's governments;

(4)

The rules of departments of the local people's governments.

The provisions mentioned in the preceding Paragraph exclude regulations and rules.

Chapter III Jurisdiction of the Taxation Administrative Review

Article 10

Objections against specific administrative actions of tax authorities at any level shall be referred to the tax authorities at a higher level for administrative review.

The objections against the specific administrative actions of the local tax bureaus at provinces, autonomous regions and municipalities directly under the central government may be taken to the State Administration of Taxation or the people's governments of provinces, autonomous regions and municipalities directly under the central government for review.

Article 11

The objections against the specific administrative actions of the State Administration of Taxation shall be taken to the State Administration of Taxation for administrative review. In case of disagreement to the review decision, the applicants may lodge an administration lawsuit to the people's court or may apply to the State Council for arbitration. The ruling of the State Council is final.

Article 12

Those who have any objections against the specific administrative actions of tax authorities or organizations other than those prescribed in Articles 10 and 11 of the Rules shall apply for administrative review in accordance with the following rules:

(1)

Those who have any objections against the specific administrative actions of municipalities separately listed in the state budgetary planning shall apply for administrative review to the provincial tax bureaus.

(2)

Those who have objections against the specific administrative actions of tax offices or inspection departments of tax bureaus at any level shall apply for administrative review to their supervising tax authorities.

(3)

Those who have objections against the withholding actions of withholding agents shall apply for administrative review to the tax authorities at a higher level than the competent tax authorities in charge of the withholding agent. As for objections against the tax collection actions of agencies entrusted by the tax authorities, the application for review shall be brought to the tax authorities at a higher level than the authorization tax authority.

(4)

For tax-related cases jointly investigated by the state tax bureau,(including inspection department and tax office) and local tax bureau (including inspection bureau and tax office) , tax authority and other administrative departments, all departments involved shall, in accordance with their respective jurisdiction, take specific administrative actions respectively rather than jointly after consulting other parties.

For objections against the specific administrative actions jointly made by the state tax bureau (including inspection bureau and tax office) and local tax bureau (including inspection bureau and tax office) , the application for review shall be made to the State Administration of Taxation. For objections against the specific administrative actions made jointly by the tax authority and other administrative departments, the application for review shall be submitted to their common supervising administrative authority at a higher level.

(5)

For objections against the specific administrative actions of a dissolved tax department made before it was dissolved, the application for the review shall be submitted to the tax authority at a higher level than the former tax authority.

For any one of the circumstances described in(2) ,(3) ,(4) and(5) , the applicants may apply for review to the local county people's government where the specific administrative action occurs. The county people's governments accepting the application shall be responsible for transferring the application according to laws and regulations.

Chapter IV Application for Tax Administrative Review

Article 13

Applicants may put forward the application for administrative review within 60 days after being notified of the specific administrative action of the tax authorities. Where the legal time limit is delayed due to justifiable reasons such as force majeure or obstacles set by the respondents, the application time limit shall start from the date of the elimination of the obstacles.

Article 14

Where the taxpayers, withholding agents and sureties of tax payment object to the actions listed in Item 1 and Subparagraph 1,2,3 in Item 6 of Article 8 of the Rules, they shall apply for administrative review first. Should disagreement to the decision of the administrative review occur, they might then appeal to the people's court.

Where applicants apply for administrative review according to the preceding provisions, they shall first pay taxes and overdue fines or provide relevant guarantees in line with the tax amount and time limit confirmed by tax authorities in accordance with laws and regulations, after the confirmation of which by the tax authorities, they may apply for administrative review within 60 days starting from the date of confirmation.

The means of guarantee provided by applicants include surety, mortgage and pledge. The tax authorities taking the specific administrative action shall examine the qualification and credit of the surety, and have the right to refuse those without legal qualifications or ensuring capacity. The tax authorities taking the specific administrative action shall examine the mortgage and pledge provided and shall refuse to confirm those falling short of legal conditions.

Article 15

Where the applicants object to other specific administrative actions than the actions listed in Item 1 and Subparagraph 1, 2, 3 in item 6 of Article 8 of the Rules, they may apply for administrative review or directly appeal to the people's court.

Article 16

Applicants may make applications either in written form or orally. In case of oral application, the review authorities shall record on spot the basic information about the applicants, their request for administrative review, and the key facts, arguments and time of the review application.

Article 17

Taxpayers or other parties concerned requesting for administrative review are the applicants of the tax administrative review, specifically refer to the taxpayers, withholding agents, tax guarantee providers and other persons concerned.

Where the citizens having the right to apply for administrative review are dead, their families or close relatives may apply for administrative review. Where the citizens having right to apply for administrative review lose behavioral ability or are disabled, their legal representatives may apply for the administrative review on their behalf.

Where the legal persons or other organizations having right to apply for administrative review are merged, split or terminated, the legal persons or other organizations inheriting their right may apply for the administrative review.

Other citizens, legal persons or organizations having a stake in the specific administrative action under review may participate in the administrative review as third party.

A third party who is not the target of a specific administrative action but whose right has been directly deprived of, restricted or who is compelled to obligations by such specific administrative action, may apply for administrative review personally if the direct target does not make the application.

Applicants and third parties may entrust agents to take part in the administrative review on their behalf, while the respondents shall not entrust any agents to participate in the administrative review on their behalf.

Article 18

Where taxpayers or other parties concerned apply for administrative review on the specific administrative action of the tax authorities, the tax authorities taking the action shall be the respondents.

Article 19

An applicant shall not institute an administrative lawsuit to the people's court within the legal time limit for administrative review, should his application to the review authority for administrative review have been submitted and accepted. Should an applicant have lodge an administrative lawsuit to the people's court, which has accepted the case, the applicant shall not apply for administrative review.

Chapter V Acceptance of Tax Administrative Review

Article 20

After receiving the application for administrative review, the review authority shall examine it within 5 days and make a decision on whether to accept it. The review authority shall refuse those applications inconsistent with the Rules and notify the applicants in written form.

Applications for administrative review shall be refused in the following circumstances:(1) applications for cases outside the scope of administrative review;(2) applications submitted after the legal time limit;(3) applications without specific respondent and objects of administrative review;(4) applications having been submitted to other review authorities for administrative review and been accepted;(5) applications whose applicants have brought the cases to the people's court, which has accepted the case;(6) applications whose applicants have disputes on tax with the tax authorities, and have not pay tax and late fee or have provided no guarantees or invalid guarantee;(7) applications whose applicants do not meet the qualifications for application.

For those qualified applications that are not under the jurisdiction of a review authority, the review authority shall inform the applicants of the right review authorities they should turn to.

Should the review authority do not examine the application and make a decision on refusing it within time limit prescribed above after receiving the application for administrative review, the application shall be considered as being accepted.

Article 21

For those qualified review applications, the date when the legal affairs sections of the review authorities receive them shall be the date of acceptance. The review authorities shall notify the applicants of the acceptance of the application in written form.

Article 22

For the specific administrative actions that shall be first applied to the review authorities for administrative review and then be brought to the people's court if the applications are rejected, or no replies are given when the legal time limit for the review expires, the taxpayers or other parties concerned may lawfully bring the cases to the people's court within 15 days after receiving the rejection letters or after the expiration of the administrative review deadline, if the review authorities refuse to accept the applications or fail to reply within the review time limit.

In case of extension of review time limit according to Article 43 of the Rules, the date of the expiration of the review time limit shall be the date after the extension.

Article 23

Where the taxpayers and other parties concerned lawfully apply for review, but the review authorities refuse to accept without justifiable reasons, the tax authorities at higher level shall order the review authorities to accept the applications if the applicants do not appeal to the people's court. If necessary, the tax authorities at higher level may directly accept the applications.

Article 24

During the term of the review, the specific administrative action shall not cease unless one of the following circumstances exists:

(1)

The respondent believes it necessary to cease;

(2)

The review authority believes it necessary to cease;

(3)

The applicant applies for ceasing implementation and the review authority believes the request is reasonable and determines to cease the implementation;

(4)

It shall cease according to laws and regulations.

Article 25

The administrative review shall be suspended in any of the following circumstances:

(1)

The applicant dies and it is necessary to wait for the inheritor to make clear whether or not to participate in the administrative review;

(2)

The applicant has lost the capability to engage in litigation and his legal representative has not been designated yet;

(3)

The administrative institution, the legal person or any other organization as one of the parties has terminated, and the party to inherit its rights and obligations has not been determined yet;

(4)

The review authority can not investigate for a while because of force majeure;

(5)

The basis for the specific administrative action is being processed according to Article 39 and 40 of the Rules;

(6)

The adjudication of the case pending is dependent on the results of the trial of another case that has not yet been concluded;

(7)

The respondent is performing certain duties as the applicant applied for;

(8)

Other circumstances that warrant the suspension of the administrative review.

The suspension of the administrative review shall be notified to parties concerned in written form. The administrative review shall resume after the causes of the suspension have been eliminated.

Article 26

The administrative review shall be terminated in any of the following circumstances:

(1)

The applicant withdraws the application for administrative review according to Article 38 of the Rules;

(2)

After accepting of the application, the review authority finds that other review authority or the people's court has accepted the case prior to it;

(3)

The applicant dies without an inheritor, or the inheritor waives the right to apply for administrative review;

(4)

After the termination of a legal person or other organization, the applicant of the administrative review, its inheritor waives the right to apply for administrative review; If 60 days after the suspension of an administrative review due to circumstances 1 and 2 of Article 25 , nobody applies to resume, the administrative review shall be terminated unless sound reasons are presented;

(5)

The review authority finds out that the requirements for accepting applications are not met after accepting the application for administrative review.

The termination of the administrative review shall be notified to relevant parties in writing.

Chapter VI Evidence

Article 27

Evidence shall be classified as follows:

(1)

documentary evidence;

(2)

material evidence;

(3)

video and audio material;

(4)

testimonies of witnesses;

(5)

statements of the parties concerned;

(6)

appraisal conclusions; and

(7)

written record of spot inspection or investigation, and written record at the locale.

Article 28

In the administrative review, the respondent shall have the burden of proof for the specific administrative action it has undertaken.

Article 29

The review authority shall take facts supported by evidence as the basis for the review of the cases.

Article 30

The review authority shall examine the validity of the evidence from the following aspects based on the specific circumstances of each case:

(1)

whether the evidence meets the requirement on legal form;

(2)

whether the procurement of evidence meets the requirement prescribed by laws, regulations, rules, judicial interpretations and other provisions;

(3)

whether there exist any other law-violating circumstances that have an impact on the validity of the evidence.

Article 31

The review authority shall examine the authenticity of evidence from the following aspects based on specific circumstances of each case:

(1)

the causes that lead to the evidence;

(2)

the objective circumstances when the evidence is found;

(3)

whether the evidence is original and whether the duplicated copy is consistent with the original.

(4)

whether the interest of the witness or person providing the evidence is connected with the parties concerned in the case;

(5)

other factors that may influence the authenticity of evidence.

Article 32

The following evidence materials shall not be taken as the basis for deciding on a verdict:

(1)

evidence materials collected in a way that goes against the legal proceedings;

(2)

evidence materials infringing other persons' lawful rights and interests obtained in such ways as shooting and recording on the sneak, wire tapping etc;

(3)

evidence materials procured in such wrongful ways as temptation, fraud, menace, violence etc;

(4)

evidence materials provided by parties concerned beyond the time limit without reasonable grounds;

(5)

duplicates provided by a party concerned who refuses to present the originals without reasonable grounds, and cannot present any other supporting evidence, which are not acknowledged by the counterpart;

(6)

evidence materials which are unable to determine true or false;

(7)

testimony provided by a witness unable to express his idea precisely;

(8)

other evidence materials bearing no validity and authenticity.

The relevant materials procured by the legal affairs agencies according to item 2 of Article 4 of the Rules shall not be taken as evidence supporting the specific administrative action of the respondent.

Article 33

In the course of an administrative review, the respondent shall not go its own way to collect evidence from the applicant, other relevant organizations or individuals.

Article 34

The applicant and the third party may have access to the written reply of the respondent, evidence and justifications for the specific administrative action, and other relevant materials. The review authority shall not refuse except for materials concerning state secrets or commercial secrets or the privacy of individuals.

Chapter VII Decision of Tax Administration Review

Article 35

The administrative review adopts the way of paper examination in principle. Where, however, the applicants request for or the legal affairs section believes it necessary, the opinions of the applicants, respondents and the third party shall be solicited, and relevant organizations or individuals may be consulted for useful information.

Article 36

The review authority shall comprehensively examine the factual evidence, legal proceedings, legal basis and the validity and propriety of the rights and obligations provided for, which are the basis for the specific administrative action of the respondent.

Article 37

The legal affairs agency of a review authority shall deliver the duplicate copy of the administrative review application or the duplicate copy of the written notes of the review application to the respondent within 7 days after accepting the review application.

The respondent shall put forward a written reply and provide the evidence, basis and other relevant materials for taking the specific administrative action within 10 days after receiving the duplicate copy of the administrative review application or the duplicate copy of the written notes of the review application.

Article 38

Before the review decision is made, the applicant may withdraw its application, but shall not apply again for administrative review based on the same basic facts or reasons.

Article 39

Where an applicant applies for examination of the relevant rules when applying for administrative review according to Article 9 of the Rules, the review authority shall lawfully handle that within 30 days if it has the right to do so. If it is beyond its mandate, the review authority shall transfer the case to the appropriate administrative department within 7 days in conformity with the legal procedures. The administrative department with proper mandate shall settle the case within 60 days according to the law. During the processing period, the examination on the specific administrative action shall be suspended.

Article 40

Where the review authority believes, during the examination, that the specific administrative action of the respondent is not legally based and the authority has the right to deal with it, the review authority shall deal with it within 30 days according to the law. For cases beyond its mandate to deal with, the review authority shall, within 7 days, transfer it in line with the legal procedures to the appropriate state department. During the process of handling the legal basis,, the examination on the specific administrative action shall be suspended.

Article 41

The legal affairs agency shall examine the validity and properness of the specific administrative action taken by the respondent, put forward proposals and, upon consent of the head of the review authority, work out the review decision in conformity with the following rules:

(1)

Where the facts are clear, evidence strong, legal basis correct, procedures lawful and content proper, the review authority shall maintain the administrative action.

(2)

Where the respondent fails to perform its statutory duty, the review authority shall make a decision that the respondent shall perform its duty within certain time limit.

(3)

In one of the following circumstances, the review authority shall decide to cancel, change or confirm the action unlawful. Should an administrative action be decided to cancel, change or confirmed unlawful, the review authority may order the respondent to take a new administrative action within certain time limit:

(a)

The main facts are not clear, the evidence is not sufficient.

(b)

The legal basis is wrong.

(c)

The legal procedures are not followed.

(d)

The respondent steps over or abuses its power.

(e)

The specific administrative action is obviously inappropriate.

Should the review authority order the respondent to take a new administrative action, the respondent shall not take the same or similar action based on the same facts and arguments. However, where the review authority decides to cancel the action as it is found to be taken in a way violating the legal procedures, the respondent is not bound by the above provision when taking a new administrative action.

(4)

Where the respondent fails to put forward a written reply, provide the basis, evidence and other relevant materials for the specific administrative action in accordance with Article 37 of the Rules, the specific administrative action shall be deemed as having no evidence, no basis. Hence a decision shall be made to cancel the action.

For those major and difficult review applications, decisions shall be worked out by group discussions of the review authorities. The criteria for categorizing cases as major and difficult shall be defined by the review authorities.

Article 42

The applicant may request simultaneously for administrative compensation when applying for administrative review. For those requests complying with the relevant rules of the State Compensation Law, the review authority shall decide that the respondent makes compensation at the same time when it decides to cancel, change, or confirm the administrative action unlawful.

Where the applicant does not request for administrative compensation when applying for review, the review authority shall order the respondent to refund the tax, late fee and fine, lift such mandatory measures as seizing or detaining properties, or to make equivalent amount of compensation at the same time when the review authority decides to lawfully cancel or change the specific administrative action which specifies the tax, late fee and fine, as well as such mandatory measures as seizing or detaining the properties.

Article 43

The review authority shall make the review decision within 60 days from the date of accepting the review application. In terms of complicated cases on which the review decision cannot be made within the set time limit, the time limit may be extended properly upon approval by the head of the review authority. The applicant and respondent shall both be notified of the extension, which shall not be more than 30 days.

The review decision made by the review authority shall be in written form with its seal stamped on.

The administrative review decision takes effect as soon as it is served to the party concerned.

Article 44

The respondent shall execute the administrative review decision.

Where the respondent fails to follow the decision or prolongs the execution of the decision without any acceptable reasons, the review authority or the relevant higher-level administrative department shall order it to execute within a certain time limit.

Article 45

Where the applicant neither lodges a lawsuit nor executes the administrative review decision, or fails to follow the final review decision, it shall be dealt with in line with the following rules:

(1)

In case of the specific administrative action maintained, the administrative department taking the specific administrative action shall lawfully enforce the implementation of the decision or apply to the People's Court for enforced execution;

(2)

In case of the specific administrative action being changed, the review authority shall enforce the execution of the decision or apply to the People's Court for enforced execution.

Chapter VIII Supplementary Rules

Article 46

The review authorities, the staff of the review authorities and the respondents shall be held legally responsible for actions violating the Administrative Review Law and the Rules during the tax administrative review in accordance with Chapter Άφ of the Administrative Review Law of the People's Republic of China.

Article 47

The review authority shall not charge any fee to the applicant in accepting the tax review application.

Article 48

The review authority may use a special review stamp in accepting, examining and making decisions on review applications. The special review stamp is equally valid as the administrative department stamp.

Article 49

The counting of the time limit of administration review and the delivery of the administrative review documents shall follow the rules of the Civil Procedure Law on the counting of time limit and service.

The terms 'five days' or 'seven days' mentioned in the Rules about the time limits for review refer to working days, which exclude holidays.

Article 50

When dealing with administrative review cases, the tax authorities shall use fixed document formats, which include the following:

(1)

Registration Form for Oral Application for Administrative Review;

(2)

Decision Letter on Refusing to Accept the Review Application;

(3)

Notice on Accepting the Review Application;

(4)

Letter on Informing the Administrative Review;

(5)

Order on Accepting the Review Application;

(6)

Order on Performance;

(7)

Notice on the Presenting a Reply;

(8)

Notice on Stopping Execution;

(9)

Notice on Suspending the Administrative Review;

(10)

Notice on Terminating the Administrative Review;

(11)

Notice on the Decision on Postponement;

(12)

Letter of Decision on the Tax Administrative Review;

(13)

Letter on Transferring Normative Documents(A) ;

(14)

Letter on Transferring Normative Documents(B) .

Article 51

The State Administration of Taxation shall be responsible for the interpretation of the Rules.

Article 52

The present Rules shall be implemented as of May 1st, 2004. The Rules for Taxation Administrative Review on Taxation Affairs (For Trial Implementation) (GuoShuiFa [1999] No. 177) , promulgated by the State Administration of Taxation on September 23rd, 1999 , shall be abolished simultaneously.