Rules Concerning Tax Administrative Reconsideration (Provisional)

State Administration of Taxation Decree No. 8

Rules Concerning Tax Administrative Reconsideration (Provisional)

Chapter one  General Provisions

Article 1 In order to prevent and correct violations of laws or improper specific administrative acts in taxation affairs, protect the legal rights and interests of taxpayers and other interested parties in taxation affairs and ensure that taxation authorities exercise their powers in accordance with the law, these Rules are formulated on the basis of the Administrative Reconsideration Law of the People's Republic of China, the Tax Administration Law of the People's Republic of China and other relevant regulations.

Article 2 Taxpayers and other interested parties who believe their legal rights and interests have been infringed upon by a specific administrative act of taxation authorities, may apply for reconsideration to the taxation administrative reconsideration organ in accordance with the law; the taxation administrative reconsideration organ shall receive and handle the application for administrative reconsideration, and issue the administrative reconsideration decision in accordance with these Rules.

Article 3 The taxation administrative reconsideration organ referred to hereunder (hereinafter referred to as the "Reconsideration Organ") shall mean the taxation authority that receives and handles applications for administrative reconsideration, and in accordance with the law, reconsiders specific administrative acts and issues administrative reconsideration decisions.

Article 4 The Reconsideration Organ's internal department responsible for taxation legal work (hereinafter referred to as "Department for Legal Work") shall be specifically responsible for the administrative reconsideration matters and perform the following duties:

1. To receive and handle the application for administrative reconsideration;

2. To make an investigation and collect evidence from relevant organizations or individuals and

to look up documents and materials;

3. To reconsider and determine whether the specific administrative act complies with the law or

is appropriate, and to prepare the administrative reconsideration decision;

4. To handle or forward the application for reconsideration of the provisions set forth under

Article 9 hereof;

5. To propose treatment methods concerning the defendant's act in violation of the

Administrative Reconsideration Law and these Rules in accordance with its authorized responsibilities and the stipulated procedure;

6. To handle the matters concerning the responding to any administrative litigation brought

against the Reconsideration Organ as a result of refusing to accept the administrative reconsideration decision;

7. To inspect and supervise the administrative reconsideration work of the lower level taxation authorities;

8. To handle the compensation matters for the administrative reconsideration cases;

9. To handle the statistics, reporting, and filing matters related to the cases of administrative reconsideration, administrative litigation, compensation, etc.

Taxation authorities at all levels shall establish well-functioning organizations for legal work and designate certain staff to be responsible for the administrative reconsideration and the responding to the administrative litigation on a full time basis to ensure the successful implementation of the administrative reconsideration and the responding to the administrative litigation.

Article 5 The Reconsideration Organ must promote awareness of responsiveness and service, establish the concept of exercising administrative power in accordance with the law, diligently perform the responsibilities of the administrative reconsideration, abide by the law, ensure the right implementation of the law, correct mistakes on a timely basis, and carry out the administrative reconsideration activities in accordance with the law and the principles of justice, openness, promptness, and convenience to the people.

Article 6 In the event of non-acceptance of the administrative reconsideration decision, the taxpayer or other interested parties may file an administrative litigation with a people's court in accordance with the provisions of the Administrative Procedure Law.

Article 7 The expenses incurred by the taxation authorities at all levels for the purpose of administrative reconsideration or litigation matters shall be funded by the administrative budget.

Chapter two  Scope of Tax Administrative Reconsideration

Article 8 The Reconsideration Organ shall accept and hear applications filed by applicants who do not accept the specific administrative acts listed below:

1. Tax collection acts carried out by the taxation authority, including the specific administrative

acts involving determinations of subject of taxation, object of taxation, scope of taxation, tax reduction, tax exemption and tax refund, applicable tax rate, tax calculation base, intermediate links of taxation, term of taxation, place of taxation, tax payment collection techniques, etc., the collection of tax payment and surcharge of penalty for delay in tax payment, as well as the tax withholding and remittance and the  tax collection and remittance action by the withholding agent or the tax collection institution as authorized by the taxation authority;

2. Revenue securement measures taken by the taxation authorities:

(1) written notifications to banks or other financial organizations to temporarily freeze payments from a deposit account;

(2) the seizure or sealing of commodities, goods or other assets.

3. Failure by the taxation authority to release the secured revenue on a timely basis, which results in the damage to the legal rights and interests of the taxpayer and other interested parties;

4.Enforcement measures taken by the taxation authorities:

(1) written notifications to banks or other financial organizations to withhold and remit tax payments from a deposit account;

(2) auctioning or sales of seized or sealed commodities, goods or other property.

5. Administrative penalty imposed by the taxation authorities:

(1) fines;

(2) confiscation of assets and illegal gains;

(3) suspension of the tax refund rights for exports;

6. Failure by the taxation authorities to properly handle or respond in accordance with the law:

(1) Failure to approve tax reduction and exemption or export tax refund;

(2) Failure to deduct tax payment;

(3) Failure to refund tax payment;

(4) Failure to issue the taxation registration certificate and sell invoices;

(5) Failure to issue the tax payment certificate or other receipts;

(6) Failure to grant the standard VAT taxpayer status;

(7) Failure to grant permission on deferring the filing of returns or the tax payment;

7. Cancellation of standard VAT taxpayer status by the taxation authorities;

8. Capturing invoices or suspension of the sale of invoices;

9. Order by the taxation authority requiring the taxpayer to provide a taxation guarantee or failure by the taxation authority to confirm the validity of the taxation guarantee in accordance with the law;

10. Failure by the taxation authority to grant in accordance with the law a reward to the person who has reported an offence;

11. Acts of the taxation authority in issuing notifications to border control authorities to prevent from leaving the country;

12. Other specific administrative acts made by taxation authorities.

Article 9 If the taxpayer and other interested parties believe the following provisions that are invoked as the basis for the specific administrative acts are illegal, they may apply for reconsideration of such provisions along with their application for administrative reconsideration against the specific administrative acts:

1. The provisions of State Administration of Taxation and other departments of the State Council;

2. The provisions of the taxation authorities at all levels;

3. The provisions of the local People's governments at all levels;

4. The provisions of departments of the local governments.

Ministerial rules are not included in the provisions set forth above.

Chapter 3  Jurisdiction of Tax Administrative Reconsideration

Article 10 The application for administrative reconsideration of specific administrative acts of the taxation authority shall be filed with the taxation authority of a higher level.

The application for administrative reconsideration of specific administrative acts of the taxation authority at the level of provinces, autonomous regions, and directly administered municipalities may be filed with State Administration of Taxation or the people's governments at the level of provinces, autonomous regions, and directly administered municipalities.

Article 11 The application for administrative reconsideration of specific administrative acts of State Administration of Taxation shall be filed with State Administration of Taxation. In case of refusing to accept the decisions of the administrative reconsideration, the applicant may file an administrative litigation with a competent people's court or apply to the State Council for a decision, which shall be final.

Article 1. Article 12 The application for administrative reconsideration of specific administrative acts of

the taxation authorities or organizations other than those set forth under Article 10 and 11 hereof shall be filed in accordance with the following stipulations:

1. The application for administrative reconsideration of specific administrative acts of the taxation authorities of any municipality separately listed on the State plan shall be filed with the provincial tax bureau.

2. The application for administrative reconsideration of specific administrative acts of taxation offices or the investigation departments of tax bureaus at all levels shall be filed with their respective tax bureau in charge.

3. The application for administrative reconsideration of the tax payment withholding and remitting act of a withholding agent shall be filed with the taxation authority at one level above the taxation authority supervising the withholding agent in question; The application for administrative reconsideration of the tax payment collecting acts by entities authorized by the taxation authority shall be filed with the taxation authority at one level above the taxation authority authorizing such entity.

4. In the event of any tax related case subject to a joint investigation by State Administration of Taxation (investigation bureaus, tax offices) and local taxes administrations (investigation bureaus, tax offices), or by the taxation authorities and other administrative authorities, the authorities set forth above shall, based on their respective statutory authority and upon mutual consultation, carry out respective specific administrative acts and may not perform joint specific administrative acts.

The application for administrative reconsideration of specific administrative acts jointly made by State Administration of Taxation (investigation bureaus, tax offices) and local taxes administrations (investigation bureaus, tax offices) shall be filed with the State Administration of Taxation; The application for administrative reconsideration of specific administrative acts jointly made by the taxation authorities and other administrative authorities shall be filed with their common immediate supervisory administrative authority;

5. The application for administrative reconsideration of specific administrative acts carried out by taxation authorities before they are dissolved shall be filed with the taxation authority one level above the taxation authority that continues to exercise the functions and powers of such dissolved taxation authority.

In case of any of the circumstances listed under items 2, 3, 4, and 5, the applicant may file an application for administrative reconsideration with the county level people's government at the place where the specific administrative act occurs, and such county level people's government shall forward the application in accordance with the law.

Chapter four  Application for Tax Administrative Reconsideration

Article 13 The applicant may file an application for administrative reconsideration within 60 days after the applicant becomes aware of the specific administrative act carried out by the taxation authority.

In case of any delay in the statutory application period as a result of force majeure or other reasonable grounds as the impediment set up by the defendant, the application period shall continue to count upon elimination of such impediment.

Article 14 In case of any application for administrative reconsideration filed by a taxpayer, a withholding agent, and a tax payment guarantor against the acts listed under item 1 and sub-items (1), (2) and (3) of item 5 under Article 8 hereof, the applicant must first apply for administrative reconsideration; if the applicant does not accept the administrative reconsideration decision, the applicant may file an administrative litigation with a people's court.

Prior to the filing of an application for administrative reconsideration in accordance with the provisions of the preceding paragraph, the applicant shall first make or remit the tax payment and surcharge for late payment or provide a corresponding security pursuant to the amount and timing determined by the taxation authority based on the law and administrative regulations. The application for administrative reconsideration may be filed within 60 days after the tax payment and surcharge has been made or following the confirmation by the taxation authority carrying out the specific administrative act that the security has been provided.

The applicant may provide security by means of guaranty, mortgage or pledge. The taxation authority carrying out the specific administrative act shall verify the qualification and credibility of the guarantor and may reject the guaranty provided by the guarantor without the statutory qualification or incompetent to provide guaranty. The taxation authority carrying out the specific administrative act shall verify the mortgage or pledge provided by a mortgagor or a pledgor and may reject the mortgage or pledge that fails to meet the statutory requirement.

Article 15 In case of any application for administrative reconsideration of the specific administrative acts other than those listed under item 1 and sub-items (1), (2) and (3) of item 6 under Article 8 hereof, the applicant may have the option to apply for administrative reconsideration or to file an administrative litigation with a people's court directly.

Article 16 The applicant may file an application for administrative reconsideration in writing or orally; in case of an oral application, the Reconsideration Organ shall document the basic information of the applicant, the administrative reconsideration claim, the major facts, reasons and time applied for administrative reconsideration.

Article 17 The taxpayer and other interested party filing the application for administrative reconsideration in accordance with the law shall be the applicant of the taxation administrative reconsideration, which specifically refers to the taxpayer, withholding agent, tax payment guarantor, or other interested parties.

In case of death of the citizen being entitled to file an application for administrative reconsideration, the close relatives of such citizen may apply for administrative reconsideration; if the citizen being entitled to file an application for administrative reconsideration is a person without or with limited disposing capacity, such citizen's agent may file an application for administrative reconsideration on behalf of such citizen.

In case of any merger with other organizations, division or dissolution of the legal person with the right to file an application for administrative reconsideration, the legal person or other organization succeeding its rights and obligations may file an application for administrative reconsideration.

If the specific administrative act subject to administrative reconsideration involves other interested citizens, legal persons or other organizations, such interested party may intervene in the administrative reconsideration as a third party.

If any third party whose rights are directly deprived or limited or who is imposed of any obligation by the specific administrative act although such party is not the opposite party of such specific administrative act, such third party may separately file an application for administrative reconsideration in the absence of the application for administrative reconsideration filed by the opposite party of such specific administrative act.

The applicant and the third party may entrust their agents to participate in the administrative reconsideration; the defendant may not entrust any agent to participate in the administrative reconsideration.

Article 18 In case of the application for administrative reconsideration filed by the taxpayer and other interested parties against any specific administrative act of the taxation authority, the taxation authority carrying out such specific administrative act shall be the defendant.

Article 19 If the Reconsideration Organ has accepted and heard the application for administrative reconsideration filed by the applicant, such applicant may not file an administrative litigation with a people's court within the statutory time limit for the administrative reconsideration; if a people's court has already accepted and heard the administrative litigation filed by the applicant, such applicant may not file an application for administrative reconsideration.

Chapter five Acceptance and Hearing of the Application for Tax Administrative Reconsideration

Article 20 The Reconsideration Organ shall examine the application for administrative reconsideration and make a decision on whether to accept it within 5 days following its receipt of such application. In case of non-conformity of the application for administrative reconsideration with the requirements of these Rules, a non-acceptance decision shall be made and the applicant shall be informed in written form.

A non-acceptance decision shall be made in respect to an application for administrative reconsideration in any of the following circumstances:

1. The application is outside of the scope of the administrative reconsideration;

2. The application has exceeded the statutory time limit;

3. The application is without a definite defendant or any object subject to administrative reconsideration;

4. An application for administrative reconsideration has been filed with and accepted by another statutory reconsideration organ;

5. An administrative litigation has been brought to and accepted by a people's court;

6. The applicant fails to make tax payment or surcharge for overdue tax payment as stipulated, or to provide security, or to provide qualified security in case of a tax payment dispute;

6.

7. The applicant is not qualified to file an application for administrative reconsideration.

In case the application for administrative reconsideration is outside of the jurisdiction of the Reconsideration Organ being applied to, such Reconsideration Organ shall notify the applicant to file an application with a competent reconsideration organ.

If, following the receipt of the application for administrative reconsideration, the Reconsideration Organ fails to conduct an examination and issue a non-acceptance decision within the time limit as stipulated in the preceding paragraph, such application shall be deemed as accepted.

Article 21 A qualified application for administrative reconsideration shall be deemed as accepted on the day when the Department for Legal Work under the Reconsideration Organ receives it; The applicant shall be informed of the acceptance of the application for administrative reconsideration in written form.

Article 22 In dealing with a specific administrative act against which an application for administrative reconsideration shall be first filed before an administrative litigation can be filed with a people's court in case of non-acceptance of the administrative reconsideration decision rendered by the Reconsideration Organ, if the Reconsideration Organ rejects such application or fails to respond within the time limit of the administrative reconsideration following its acceptance, the taxpayer and other interested parties may file an administrative litigation with a people's court in accordance with the law within 15 days following receipt of the rejection decision or upon the expiry of the administrative reconsideration period.

In case of the extension of the administrative reconsideration period pursuant to Article 43 hereof, the expiration date of the administrative reconsideration period shall be the last day of the extended term.

Article 23 If the Reconsideration Organ rejects the application for administrative reconsideration filed by the taxpayer and other interested parties in accordance with the law without due causes and the applicant has not  filed an administrative litigation with any people's court, the taxation authority of a higher level shall order the Reconsideration Organ to accept it; the taxation authority of a higher level may directly accept such application if necessary.

Article 24 In the course of hearing an administrative reconsideration case, the execution of the specific administrative act shall not be suspended. However, in one of the following circumstances, the execution of the specific administrative act may be suspended:

1. Where suspension is deemed as necessary by the defendant;

2. Where suspension is deemed as necessary by the Reconsideration Organ;

3. Where suspension of execution is requested by the applicant and the Reconsideration Organ deems it reasonable and makes the decision on the suspension of the execution;

4. Where suspension is required by the laws and regulations.

Article 25 In case any of the following conditions arises during the period of administrative reconsideration, the administrative reconsideration shall be suspended:

1. If the applicant dies and it is necessary to wait for his/her heir to express his/her intent to participate in the administrative reconsideration;

2. If the applicant has lost the capacity to engage in litigation and the agent for such applicant has not been designated yet;

3. If the administrative authority, legal person or other organization as one party has been dissolved and the party assuming its rights and obligations has not been designated yet;

4. If the Reconsideration Organ tentatively fails to conduct an investigation due to force majeure;

5. If the basis of the specific administrative act is being dealt with in accordance with Article 39 and 40 hereof;

6. If the result of the current case is conditioned upon the result of another case and the trial of such other case has not yet been concluded;

7. If the applicant requests the defendant to perform its statutory duties and such defendant is in the course of conducting such performance;

8. If other circumstances arise that warrant the suspension of the administrative reconsideration.

Article 26 In case any of the following conditions arises during the period of administrative reconsideration, the administrative reconsideration shall be concluded:

1. If the application for administrative reconsideration is withdrawn in accordance with Article 38 hereof;

2. If, upon acceptance of the application for administrative reconsideration, it is found that another reconsideration organ or a people's court has accepted the case prior to this Reconsideration Organ;

3. If no heir comes forward to participate in the administrative reconsideration or the heir waives the right of the administrative reconsideration following the death of the applicant;

4. If, after the legal person or other organization as the applicant being dissolved, the successor of its rights and obligations waives the right of the administrative reconsideration; if no one comes forward to participate in the reconsideration within 60 days following the suspension of the administrative reconsideration due to reasons listed under items 1 and 2 of the preceding article, the administrative reconsideration shall be concluded except for any due reasons;

5. If the application for administrative reconsideration is found to be disqualified for the acceptance criteria following its acceptance.

The interested parties shall be informed of the conclusion of the administrative reconsideration in written form.

Chapter six   Evidence

Article 27 Evidence for the administrative reconsideration shall be classified as follows:

1. documentary evidence;

2. material evidence;

3. audiovisual material;

4. testimony of witnesses;

5. statement of the parties;

6. conclusions of verification;

7. written proof of examination and on-site written record.

Article 28 In the course of the administrative reconsideration, the defendant shall bear the burden of proof for the specific administrative act performed.

Article 29 The Reconsideration Organ shall examine the reconsideration case based on the facts established and proved by the evidence.

Article 30 The Reconsideration Organ shall, based on the specific situation of each case, examine the legality of the evidence in the following respects:

1. Whether or not the evidence is in conformity with the legally required form;

2. Whether or not the evidence is obtained in accordance with the laws, regulations, rules, judicial interpretations and other requirements;

3. Whether or not there is any other illegal situation that may affect the validity of the evidence.

Article 31 The Reconsideration Organ shall, based on the specific situation of each case, examine the truthfulness of the evidence in the following respects:

1. How the evidence is formed;

2. The objective environment under which the evidence is identified;

3. Whether the evidence is original or copy and whether or not the copy is consistent with the original;

4. Whether or not there is an interest relation between the parties to the case and the person providing the evidence or the witness;

5. Other factors that may affect the truthfulness of the evidence.

Article 32 The following evidences may not be taken as the basis for determination of a case:

1. The evidence that is collected in violation of the statutory procedure;

2. The evidence that is obtained by means of infringing upon others' legal interests such as peep photographing, secret recording, eavesdropping, etc.

3. The evidence that is obtained through improper means such as enticement, fraud, intimidation, violence, etc;

4. The evidence that is provided by the parties following the expiration of the time limit for

evidence supply without any due reasons;

5. The copy or copies that the other party refuses to acknowledge and is /are not supported by other evidences in case that the party refuses to provide the original without due causes;

6. The evidence whose authenticity cannot be affirmed;

7. The testimony made by a witness who is unable to correctly express his or her will;

8. Such other evidence that fails to satisfy the requirements of legality and truthfulness.

The relevant material obtained by the Department for Legal Work based on its duties as stipulated under item 2 of Article 4 hereof may not be invoked as evidence to support the specific administrative act carried out by the defendant.

Article 33 During the process of the administrative reconsideration, the defendant may not, on its own, collect evidence from the applicant and other organizations or individuals.

Article 34 The applicant and the third party may access the defendant's written response, the evidence and the basis for the specific administrative act, and other relevant materials; except for those involving state secrets, commercial confidential information or privacy, the Reconsideration Organ may not reject such looking-up request by the applicant.

Chapter seven  Decision on Tax Administrative Reconsideration

Article 35 In principle, the administrative reconsideration shall be conducted through paper examination; however, upon request by the applicant or as the Department for Legal Work deems as necessary, the opinion of the applicant, the defendant and the third party shall be heard and the organization and personnel concerned may be subject to investigation and inquiry.

Article 36 The Reconsideration Organ shall conduct a comprehensive examination over the factual evidence, legal procedure and legal basis that the specific administrative act carried out by the defendant are based as well as the legality and appropriateness of the rights and obligations so established.

Article 37 The Department for Legal Work under the Reconsideration Organ shall deliver to the defendant the copy of the application for administrative reconsideration or of the notes of the application for administrative reconsideration within 7 days following acceptance of the application for administrative reconsideration.

The defendant shall, within 10 days following its receipt of the application for administrative reconsideration or of the notes of the application for administrative reconsideration, provide its written response and the evidence, basis and other materials in support of the specific administrative act carried out.

Article 38 In case of the applicant's withdrawal of the application for administrative reconsideration prior to the issuance of the administrative reconsideration decision, the withdrawal is permitted and no new application for administrative reconsideration based on the same basic facts or grounds is allowed to file afterwards.

Article 39 If the applicant applies for reconsideration of the relevant provisions along with the application for administrative reconsideration in accordance with Article 9 hereof, the Reconsideration Organ, if having the jurisdiction over such provisions may handle such reconsideration within 30 days; otherwise, the Reconsideration Organ shall forward this issue to the administrative authority with jurisdiction for its handling within 7 days, and the administrative authority with jurisdiction shall handle it in accordance with the law within 60 days. During the handling process, the reconsideration of the specific administrative act shall be suspended.

Article 40 If the Reconsideration Organ believes that the basis for the specific administrative act carried out by the defendant is not consistent with the law during its reconsideration of the specific administrative act, the Reconsideration Organ, if having the jurisdiction, may handle this issue within 30 days; otherwise, the Reconsideration Organ shall forward it to the governmental authority with jurisdiction for its handling under the law. During the handling process, the reconsideration of the specific administrative act shall be suspended.