Laws of the People's Republic of China

the State Administration of Taxation

Reply of the State Administration of Taxation on Relevant Issues concerning the Term for Recovering Overdue Taxes

Guo Shui Han [2005] No.813

Taxation Administration of Hubei Province,

Your Request for Instructions on Specifying the Term for Recovering Overdue Taxes (E Guo Shui Fa [2005] No.82) has been received. We hereby give a reply as follows upon deliberation:

In accordance with the Law of the People's Republic of China concerning the Administration of Tax Collection (hereinafter referred to as the Tax Collection Administration Law) and the provisions of other tax collection laws and regulations, any taxpayer has the duty to pay taxes according to law. Where a taxpayer owes taxes, the tax authority shall recover the overdue taxes according to law till they are collected and turned into the national treasury, and no entity or individual may be exempted from payment of overdue taxes. There is no time limit for the tax authority to recover the overdue taxes.

The provision on the term for recovering overdue taxes as prescribed in Article 52 of the Tax Collection Administration Law shall mean that any tax that remains outstanding or underpaid due to the reasons of the tax authority or any taxpayer but fails to be discovered within a certain period, will not be recovered if the time limit expires. If the taxpayer has declared or the tax authority has made investigation into the overdue taxes, the tax authority will not be restricted by the provision of this Article on the term for recovering overdue taxes, and shall recover the overdue taxes according to law without a time limit.

The State Administration of Taxation

August 16, 2005