CHAPTER IV-TAX INSPECTION¹

　　Article 32 The tax authorities shall have the right to conduct tax inspection as follows：

　　（1） to inspect a taxpayer²'s accounting³ books， supporting vouchers⁴ for the accounts， statements and the relevant information； to inspect a withholding⁶ agent's accounting books， supporting vouchers for the accounts and the relevant information in respect of the amount of tax withheld⁷ and remitted⁹ or collected and remitted.

　　（2） to inspect a taxpayer's taxable commodities， goods or other property at the taxpayer's places where production or business operations are conducted and places where goods are stored； to inspect a withholding agent's operational conditions in respect of the withholding and remittance¹⁰ of tax or the collection and remittance of tax.

　　（3） to order a taxpayer or withholding agent to furnish documents， evidentiary materials and information pertaining¹¹ to the payment of tax or the amount of tax withheld and remitted or collected and remitted.

　　（4） to make inquiries¹² of a taxpayer or withholding agent regarding the relevant issues and circumstances connected with the payment of tax or the amount of tax withheld and remitted or collected and remitted.

　　（5） to inspect supporting documents， vouchers and information pertaining to the taxable commodities， goods or other property transported by consignment¹³ or sent by post by a taxpayer at railway stations， docks， airports， enterprises engaged in postal¹⁴ services and the branches thereof.

　　（6） upon approval of the commissioner¹⁵ of a tax bureau （or a sub bureau thereof） above the county level， to examine and verify the deposit accounts that a taxpayer engaged in production or business operations or a withholding agent has opened with banks or other financial institutions， on presentation of a permit for the inspection of deposit accounts which is of a nationally unified¹⁶ form； to examine and verify the savings¹⁷ deposits of a taxpayer engaged in production or business operations， provided， however， that the saving deposits have been subject to the verification of the regional office of a county or municipal sub branch or municipal branch of a bank and such regional office has designated a savings section thereof to provide the relevant information.

　　Article 33 A taxpayer or withholding agent must subject itself to the tax inspection conducted by the tax authorities in accordance with the law， report the circumstances accurately¹⁸ and provide the relevant information， and shall not refuse to cooperate or conceal¹⁹ any facts.

　　Article 34 When the tax authorities conduct tax inspection in accordance with the law， the relevant departments and units shall provide support and assistance and accurately report the circumstances of taxpayers²⁰， withholding agents and other parties concerned in respect of the payment of tax and the amount of tax withheld and remitted or collected and remitted， and furnish the relevant information and evidentiary materials.

　　Article 35 When investigating a tax case in violation²¹ of the law， the tax authorities may record， tape-record， video-tape， photograph and reproduce the relevant circumstances and information in respect of the case.

　　Article 36 When conducting tax inspection， the officials sent by the tax authorities shall produce tax inspection identity cards and shall be responsible for maintaining confidentiality²³ for the persons under investigation²⁴.

　　CHAPTER V-LEGAL LIABILITIES

　　Article 37 The tax authorities shall order a taxpayer to remedy any of the following acts committed by the taxpayer within a time limit. Should the taxpayer fail to remedy it within the time limit， the tax authorities may impose a fine of not more than Renminbi 2000 Yuan on the taxpayer. If the case is serious， the tax authorities may impose a fine of an amount from Renminbi 2000 Yuan to Renminbi 10000 Yuan on the taxpayer.

　　（1） failure to apply for tax registration²⁵， change or cancellation²⁶ of tax registration within a prescribed time limit；

　　（2） failure to keep or maintain accounting books， or maintain supporting vouchers for the accounts and the relevant information in accordance with the relevant provisions；

　　（3） failure to furnish reports on the financial and accounting systems or the financial and accounting methods to the tax authorities for possible reference use in accordance with the relevant provisions.

　　Article 38 Where a withholding agent fails to keep and maintain accounting books for the tax withheld and remitted or collected and remitted， or to maintain supporting vouchers for the accounts and the relevant information in respect of the tax withheld and remitted or collected and remitted in accordance with the relevant provisions， the tax authorities shall order the withholding agent to remedy the situation within a time limit. Should the withholding agent fail to remedy the situation within the time limit， the tax authorities may impose a fine of not more than Renminbi 2000 Yuan on the withholding agent. If the case is serious， the tax authorities may impose a fine of an amount from Renminbi 2000 Yuan to Renminbi 5000 Yuan on the withholding agent.

　　Article 39 Where a taxpayer fails to fulfil tax filing requirements within a prescribed time limit or a withholding agent fails to furnish reporting schedules on the tax withheld and remitted or collected and remitted to the tax authorities within a prescribed time limit， the tax authorities shall order the taxpayer or withholding agent to remedy the situation within the prescribed time limit and may impose a fine of not more than Renminbi 2000 Yuan on the taxpayer or withholding agent. Should the taxpayer or withholding agent fail to remedy the situation within the prescribed time limit， the tax authorities may impose a fine of over Renminbi 2000 Yuan but under Renminbi 10000 Yuan on the taxpayer or withholding agent.

　　Article 40 “Evasion²⁷ of tax” means that a taxpayer fails to pay or underpays the amount of tax payable²⁸ through the adoption²⁹ of the means of forging， revising， concealing³⁰ or destroying without authorization³¹ accounting books or supporting vouchers for the accounts， or of overstating expenses or not stating or understating income in accounting books， or of filing fraudulent tax returns. Where the amount of tax evaded³² accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan， or where the taxpayer evades tax again after having been subject to administrative³³ punishment imposed by the tax authorities twice as a result of tax evasion， the tax authorities shall， in addition to pursuing the payment of tax which has been evaded by the taxpayer， impose a punishment on the taxpayer in accordance with the provisions set forth³⁴ in Article 1 of the Supplementary³⁵ Provisions Concerning the Imposition of Punishment in Respect of Offenses³⁶ of Evasion of Tax and Refusal to Pay Tax. Where the amount of tax evaded is under Renminbi 10000 Yuan or accounts for not more than ten percent of the amount of tax payable， the tax authorities shall pursue the payment of the tax evaded and impose a fine of not more than five times the amount of tax evaded.

　　Where a withholding agent fails to pay or underpays the tax which has been withheld or collected through the adoption of the means as specified³⁷ in the preceding Paragraph， and where the amount of tax evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan， a punishment shall be imposed on the withholding agent in accordance with the provisions stipulated³⁸ in Article 1 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where the amount of tax evaded is under Renminbi 10000 Yuan or accounts for not more than ten percent of the amount of tax payable， the tax authorities shall pursue the payment of the amount of tax the withholding agent has failed to pay or underpaid and impose a fine of not more than five times the amount of tax which has not been paid or underpaid.

　　Article 41 Where a taxpayer who has failed to pay the amount of tax payable by means of transferring or concealing the property， resulting in failure on the part of the tax authorities to pursue the payment of the tax underpaid， and where the amount of the tax underpaid is over Renminbi 10000 Yuan， the tax authorities shall， in addition to pursuing the payment of the tax underpaid， impose a punishment on the taxpayer in accordance with the provisions set forth in Article 2 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where the amount of tax underpaid is under Renminbi 10000 Yuan， the tax authorities shall pursue the payment of the tax underpaid， and impose a fine of not more than five times the amount of tax underpaid.

　　Article 42 Where an enterprise or institution commits an illegal act as specified in Article 40 and 41 of this Law and such act constitutes an offence， a punishment shall be imposed in accordance with the provisions set forth in Article 3 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where such act does not constitute an offence， the tax authorities shall pursue the payment of the amount of tax the enterprise or institution has failed to pay or underpaid， and impose a fine of not more than five times the amount of tax which has not been paid or underpaid.

　　Article 43 Where a taxpayer fails to pay or underpays the amount of tax payable by offering a bribe³⁹ to tax officials， a punishment shall be imposed in accordance with the provisions set forth in Article 4 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax.

　　Article 44 Where an enterprise or institution fraudulently obtains tax refund⁴⁰ for export from the State through the adoption of deceptive⁴¹ means such as fraudulently declaring the commodities it produces or operates as export goods， and where the amount of tax refund which has been fraudulently obtained is over Renminbi 10000 Yuan， the tax authorities shall， in addition to pursuing the repayment⁴² of the tax refund the enterprise or institution has fraudulently obtained， impose a punishment in accordance with the provisions set forth in Paragraph 1 of Article 5 of the Supplementary Provisions Concerning the imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where the amount of tax refund for export which has been fraudulently obtained from the State is under Renminbi 10000 Yuan， the tax authorities shall pursue the repayment of the tax refund the enterprise or institution has fraudulently obtained， and impose a fine of not more than five times the amount of tax refund which has been fraudulently obtained.

　　Where an entity²² or individual other than those as prescribed in the preceding Paragraph fraudulently obtains tax refund for export from the State， the tax authorities shall， in addition to pursuing the repayment of the tax refund the entity or individual has fraudulently obtained， impose a punishment on the entity or individual in accordance with the provisions stipulated in Paragraph 2 of Article 5 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where the amount of tax refund which has been fraudulently obtained is so small as not to constitute an offence， the tax authorities shall pursue the repayment of the tax refund the entity or individual has fraudulently obtained， and impose a fine of not more than five times the amount of tax refund which has been fraudulently obtained.

　　Article 45 In the case of refusal to pay tax， which means the refusal to pay tax by using violence or menace， the tax authorities shall， in addition to pursuing the payment of the amount of tax a taxpayer has refused to pay， impose a punishment on the taxpayer in accordance with the provisions set forth in Paragraph 1 of Article 6 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. Where the case is so trivial that no offence has been committed， the tax authorities shall pursue the payment of the amount of tax the taxpayer has refused to pay， and impose a fine of not more than five times the amount of tax the taxpayer has refused to pay.

　　In the case of refusal to pay tax by using violence which causes a person to suffer from serious injury or death， a heavy penalty shall be imposed as that on an offence of assault or manslaughter， and a fine shall be imposed in accordance with the provisions set forth in Paragraph 2 of Article 6 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax.

　　Article 46 Where a taxpayer engaged in production or business operations or a withholding agent which has been ordered by the tax authorities to pay， within a time limit， the amount of tax which should be paid or remitted but has not been paid or underpaid within a prescribed time limit， fails to pay the amount of tax within the time limit， the tax authorities may， in addition to pursuing the payment of the amount of tax the taxpayer or withholding agent has failed to pay or underpaid through the adoption of the mandatory⁴³ measures as prescribed in Article 27 of this Law， impose a fine of not more than five times the amount of tax which has not been paid or underpaid.

　　Article 47 A withholding agent which fails to withhold⁵ or collect the amount of tax which should have been withheld or collected shall pay the amount of tax which should have been withheld or collected but has not been withheld or collected， except in the case where the withholding agent has promptly⁴⁴ reported to the tax authorities the situation regarding the refusal on the part of a taxpayer to have the amount of tax withheld or collected.

　　Article 48 Where invoices⁴⁵ are printed illegally in violation of the provisions stipulated in Article 14 of this Law， the tax authorities shall destroy the invoices which have been illegally printed， confiscate⁴⁶ the illicit⁴⁷ gains， and impose a fine.

　　Article 49 The administrative punishment as prescribed in this Law shall be decided⁴⁸ by a tax bureau （or a sub bureau thereof） above the county level. Where a fine of not more than Renminbi 1000 Yuan is imposed on an individual household engaged in industry and commerce or an entity or individual which conducts business operations without a business licence， the decision shall be made by the tax station concerned.

　　Upon receipt of a fine， the tax authorities shall issue a receipt.

　　Article 50 Where violence or menace is used to obstruct⁴⁹ tax officials from performing their duties in accordance with the law， criminal liabilities shall be pursued in accordance with the provisions set forth in Article 157 of the Criminal Law. Where tax officials are refused or obstructed⁵⁰ from performing their duties in accordance with the law but no violence or menace has been used， a punishment shall be imposed by the public security authorities pursuant to the provisions stipulated in the Law Concerning the Administration of Public Security and Punishments.

　　Article 51 The People's Courts and the tax authorities shall turn over the gains from fines and confiscations they have received to the state treasury⁵¹.

　　Article 52 Where tax officials collude with taxpayers or withholding agents， or instigate⁵² or assist the same to commit the offenses specified in Article 40， 41， 42 and 44 of this Law， a punishment shall be imposed in accordance with the provisions regarding joint⁵³ offenses stipulated in the Criminal Law. Where no offence is committed， administrative punishment shall be imposed.

　　Article 53 Where tax officials take advantage of their positions and powers to accept or extort⁵⁴ the property of taxpayers or withholding agents， and such acts constitute an offence， criminal liabilities of the tax officials shall be investigated based on an offence of bribery⁵⁵. Where such acts do not constitute an offence， administrative sanctions shall be imposed on the tax officials.

　　Article 54 Where tax officials neglect their duties and fail to collect or under collect the correct amount of tax， causing enormous losses in the tax revenue of the State， criminal liabilities of the tax officials shall be investigated in accordance with the provisions set forth in Article 187 of the Criminal Law. Where such acts do not constitute an offence， administrative sanctions shall be imposed on the tax officials.

　　Tax officials who abuse their powers and deliberately⁵⁶ create difficulties for taxpayers and withholding agents shall be subject to administrative sanctions.

　　Article 55 Where decisions regarding the collection of tax or the cessation thereof， the reduction， exemption⁵⁷ or refund of tax， or the payment of tax underpaid have been made without authorization in violation of the law or the administrative regulations， the decisions so made shall be revoked⁵⁸ in accordance with this Law. In addition， the amount of tax underpaid shall be collected and the amount of tax over collected shall be refunded⁵⁹. The administrative liabilities of the officials directly responsible shall also be investigated by the authorities at a higher level.

　　Article 56 In the case of tax disputes with the tax authorities， a taxpayer， withholding agent or tax payment guarantor must first pay or remit⁸ the amount of tax and fines on tax in arrears⁶⁰ in accordance with the law or the administrative regulations， and there after may， within 60 days from the date of receipt of a payment receipt from the tax authorities， apply to the tax authorities at a higher level for reconsideration. The tax authorities at a higher level shall， within 60 days from the date of receipt of the application for reconsideration， make a decision after reconsideration. In the case of objection to the decision made after reconsideration， legal proceedings⁶¹ may be instituted with the People's Court within 15 days from the date of receipt of the decision made after reconsideration.

　　Where a party concerned objects to a sanction decision made by the tax authorities or to the mandatory measures or measures for retaining tax revenue implemented⁶³ by the same， it may， within 15 days from the date of receipt of the sanction notice or the date the tax authorities implement⁶² the mandatory measures or measures for retaining tax revenue， apply for a reconsideration to the authorities one level higher than the authorities which have made the sanction decision or implemented the mandatory measures or measures for retaining tax revenue. If the party concerned objects to the decision made upon reconsideration， it may， within 15 days from the date of receipt of the reconsideration decision， institute legal proceedings with the People's Court. Alternatively， the party concerned may， within 15 days from the date of receipt of the sanction notice or the date the tax authorities implement the mandatory measures or measures for retaining tax revenue， institute legal proceedings directly with the People's Court. In the course of making a reconsideration and instituting legal proceedings， the mandatory measures or measures for retaining tax revenue shall not cease to be implemented.

　　If the party concerned neither applies for a reconsideration of the sanction decision made by the tax authorities and institutes legal proceedings with the People's Court within the prescribed time limit nor complies with the sanction decision， the tax authorities which have made the sanction decision may apply to the People's Court for mandatory enforcement of the decision.

　　CHAPTER VI-SUPPLEMENTARY PROVISIONS

　　Article 57 A taxpayer or withholding agent may appoint a tax agent to handle its tax matters on its behalf.

　　Article 58 The administration of collection of agricultural tax， animal husbandry tax， cultivated land usage tax and deed tax shall be implemented with reference to the relevant provisions of this Law. The administration of collection of customs duty， shipping⁶⁴ tax and taxes collected by the Customs on behalf of the tax authorities shall be implemented in accordance with the relevant provisions stipulated in the law or the administrative regulations.

　　Article 59 In the case of a discrepancy⁶⁵ between the provisions of the relevant tax treaties or agreements concluded between the People's Republic of China and foreign countries and the provisions of this Law， the relevant matters shall be handled in accordance with the treaties or agreements.

　　Article 60 In the case of a discrepancy between the provisions of the tax laws promulgated⁶⁶ prior to the implementation⁶⁷ of this Law and the provisions of this Law， the provisions of this Law shall apply.

　　Article 61 The detailed⁶⁸ rules and regulations for the implementation of this Law shall be formulated⁶⁹ by the State Council in accordance with this Law.

　　Article 62 This Law shall come into force as of January 1， 1993. The “Interim Provisions of the People's Republic of China Concerning the Administration of Tax Collection” promulgated by the State Council on April 21， 1986 shall be superseded at the same time

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