GuoShuiHan[2001]No.319 April 30, 2001

The state taxation bureaus of all the provinces, autonomous regions, municipalitie directly under the Central Government and municipalities separately listed on the State plan , the local taxation bureau of Shenzhen and the Yangzhou College for Further Studies on Taxation:

On the work of the collection and payment of income tax of enterprises with Foreign investment and foreign enterprises, the State Administration of Taxation has issued the amended "Administrative Measures for the Collection and Payment of Income Tax of Enterprises with foreign investment and Foreign Enterprises" (hereinafter referred to as "Measures") and the "Working Rules for the Collection and Payment of Income Tax of Enterprises with Foreign Investment and Foreign Enterprises" (hereinafter referred to as "Rules") (GuoShuiFa [2001] No.9). The relevant issues concerning the implementation of the Measures and Rules are hereby clarified as follows:

1. On the administration of taxation assistance by taxpayer branches:

The administration of taxation assistance by taxpayers that have set up branches or business offices (hereinafter referred to as "business offices") in different regions is the joint function and duty of the taxation departments, therefore a system of taxation assistance administration overseeing the business offices of taxpayers shall be established.

1) The taxation department for the location where the head office or the business office responsible for collecting reports and paying income tax for the enterprise (hereinafter referred to as "tax collection and payment office") is located shall, after accepting the report of annual income tax collection or consolidation of the taxpayer, produce the Certificate of Report of the Collection or Consolidation of Enterprise Income Tax of the Enterprises with Foreign Investmentand Foreign Enterprises (Attachment 1) for the taxpayer in appropriate time. The certificate shall be sent to the department in charge of taxation of the place where the taxpayer's business office is located. The time limit for submitting the certificate as provided by Article 6 of the Measures shall be adjusted before June 31 of each year.

2) If the taxation department of the location where the tax collection and payment office is located has found points of clarification involving the taxpayer's business office in the examination and evaluation of the tax collection reports and needs to make further verification, it may send the "Letter for Assistance regarding Taxation Affairs of the Business Office" (Attachment 2) to the taxation department of the location where the business office of that taxpayer is located, and that taxation department of the place where that business office is located shall be responsible for the investigation and verification for affairs needing assistance, and shall write a letter about the result back to the taxation department of the location where the tax collection and payment office is located. If the taxation department of the place where the business office is located has found, in routine administration or taxation inspection, problems involving income tax such as reporting less income or listing more costs for the business office, it shall promptly notify in written form the taxation department of the location where the tax collection and payment office is located to handle the taxation affairs (Attachment 3).

3) The taxation department of the place where the business office is located shall abide by the following methods and procedures when executing Article 6 of the Measures to collect tax on-location from the business office.

a. The taxation department of the location where the business office is located may collect tax from the business office on-location only under the following circumstances:

The business office has not submitted, before the time limit (July 31) provided by Article 6 of the Measures, the "Certificate of Report of the Collection or Consolidation of Enterprise Income Tax of the Enterprises with Foreign Investment and Foreign Enterprises" produced by the taxation department of the place where the tax collection and payment office is located, or other certificates that can prove that its tax collection and payment office has reported the collection of annual income tax, without having obtained the approval documents for a reporting extension.

b. For the business office subject to the circumstances mentioned above, the amount of income tax to be collected may be verified and calculated, or be verified according to the profit level for the same industry or by other means, and the amount of tax shortfall shall be calculated and the punishment shall be determined according to the provisions of taxation laws and regulations; but if the taxpayer's collection report belongs to a profit loss or tax exemption year, the taxation department of the place where the business office is located shall notify in written form the taxation department of the place where the tax collection and payment office is located to make a unified tax adjustment (Attachment 3).

c. The taxation department of the location where the business office is located shall, after handling the taxation affairs of the business office according to the provisions mentioned above, notify in written form the taxation department of the place where the tax collection and payment office is located regarding the relevant information (Attachment 3).

2. On the examination and appraisal of the report of collection and payment

The collection and payment of enterprise income tax shall be completed within the period provided by tax laws. For this purpose, if the taxation departments of the localities can not finish the detailed examination and appraisal of the annual report form of the enterprises according to the full requirements of the Measures for Tax Examination and Appraisal within the period for collection and payment provided by tax laws before adopting electronic means for examination and appraisal or because of other reasons, they may make the initial tax examination of the relevant items provided by Item 3 of the Second Paragraph of Article 3 of the "Working Rules for the Collection and Payment of Income Tax of Enterprises with Foreign Investment and Foreign Enterprises" after receiving the report form materials submitted by the taxpayer, and shall issue the notification of collection and payment according to the result of the initial examination and appraisal within the period of collection and payment provided by tax laws. The departments shall make detailed appraisals on the taxpayers that have points of clarification arise during the initial examination and appraisal, and shall make relevant taxation adjustments.

Attachments:

1. Certificate of Report of the Collection or Consolidation of Enterprise Income Tax of the Enterprises with Foreign Investment and Foreign Enterprises

2. Letter for Assistance regarding Taxation Affairs of the Business Office

3. Letter of Contact regarding the Taxation Handlings of the Business Office

Attachment 1:

Certificate of Report of the Collection or Consolidation of Enterprise Income Tax of the Enterprises with Foreign Investment and Foreign Enterprises

Certificate No. ( ) of the State (local) taxation bureau

To the State (local) taxation bureau:

The _______________________________________________ under your jurisdiction is the business office set up in your place by the ____________________________under our jurisdiction, and has already collected or consolidated and reported its annual enterprise income tax at this bureau in Month __ Year __.

Hereby certified.

Name and official seal of the taxation department of the place where the tax collection and payment office is located.

Month__ Day__ Year __

Certificate of Report of the Collection or Consolidation of Enterprise Income Tax of the Enterprises with Foreign Investment and Foreign Enterprises

Certificate No. ( ) of the State (local) taxation bureau

To the State (local) taxation bureau:

The ____________________________________ under your jurisdiction is the business office set up in your place by the __________________________ administrated by our bureau, and has already collected or consolidated and reported its annual enterprise income tax at this bureau in Month __ Year __.

Hereby certified.

With greetings

Name and official seal of the taxation department of the place where tax collection and payment office is located

Month __ Day __ Year __

Post code and address of the taxation department:

Person responsible for business contact:

Telephone:

Fax:

Attachment 2:

Letter for Assistance regarding Taxation Affairs of the Business Office (Receipt)

No. ( ) of the State (local) taxation bureau

To the State (local) taxation bureau:

The __________________________________ under your jurisdiction is the business office set up in your place by the ________________________ administrated by this bureau, please investigate and verify the following matters regarding that business office:

Matters:

Points of Clarification:

The name and official seal of the taxation department of the place where tax collection and payment is located

Month __ Day __ Year __

Letteistance regarding Taxation Affairs of the Business Office (Receipt)

Letter No. ( ) of the State (local) taxation bureau

The state (local) taxation bureau:

The __________________________________ under your jurisdiction is the business office set up in your place by the ________________________ administrated by this bureau, please investigate and verify the following matters regarding that business office:

Matters:

points of clarification:

Registered address of the business office:

Telephone:

Fax:

With greetings

Name and official seal of the taxation department of the place where the tax collection and payment is located

Month __ Day __ Year __

Post code and address of the department in charge of taxation:

Person responsible for business contact:

Telephone:

Fax:

Attachment 3:

Letter of Contact regarding the Taxation Handlings of the Business Office

Letter No. ( ) of the State (local) taxation bureau

The State (local) taxation bureau:

The ____________________________________ under your jurisdiction is the business office set up in your place by the __________________________ administrated by our bureau.

Address of the business office:

Telephone:

Fax:

According to the Law of the People's Republic of China on Income Tax of Enterprises with Foreign Investment and Foreign Enterprises and the provisions of the "Supplementary Circular on Relevant Issues Concerning the Administrative Measures and Working Rules for the Collection and Payment of Income Tax of Enterprises with Foreign Investment and Foreign Enterprises," we will handle, based on our verification, the income tax of that business office of Year __ as follows:

1. The amount of taxable income that the business office has not collected and reported as determined by our bureau:

1) Verified amount: ___________________.

2) Amount appraised and calculated according to the profit margins of the same industry: _____________________.

3) Amount appraised and calculated by other means: _______________.

2. The amount of unreported to be collected and the punitive amount calculated by this bureau:

Applicable tax rate (actual collection rate): __________ Tax amount to be collected: _______________. Late fee ___________________ Punitive amount: ____________________.

3. The taxation affairs submitted by this bureau to you for handlings:

1) The amount of income that the business office has failed to report: ________________.

2) The amount expenses over-claimed by the business office: ___________.

3) The amount of profit (loss) of this business office for which your bureau must make taxation adjustment and handlings because the taxpayer is considered to belongs to a profit loss (tax exemption) year: _______.

4) Other matters: _________________________________________.

Name and official seal of the taxation department of the place where the business office is located

Month __ Day __ Year __

Postal code of the taxation department: Address:

Person responsible for business contact:

Telephone:

Fax:

Promulgated by The State Administration of Taxation on 2001-4-30