Overview of China's Current Tax SystemⅡ

For the time being, the State Organs having authority to formulate tax laws or tax policy mainly include National People' s Congress and its Standing Committee, State Council, Ministry of Finance, State Administration of Taxation, Tariff and Classification Committee of the State Council, and General Administration of Customs.

a) Tax laws are enacted by the National People' s Congress, e.g., the Individual Income Tax Law of the People' s Republic of China; or enacted by the Standing Committee of the National People's Congress, e.g., the Tax Collection and Administration Law of the People's Republic of China.

b) The administrative regulations and rules concerning taxation are formulated by the State Council, e.g., the Detailed Rules for the Implementation of the Tax Collection and Administration Law of the People' s Republic of China, the Detailed Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China, the Provisional Regulations of the People' s Republic of China on Value Added Tax.

c) The departmental rules concerning taxation are formulated by the Ministry of Finance, the State Administration of Taxation, the Tariff and Classification Committee of the State Council, and the General Administration of Customs, e.g., the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value Added Tax, the Provisional Measures for Voluntary Reporting of the Individual Income Tax.

The formulation of tax laws shall follow four steps: drafting, examination, voting and promulgation. The four steps for the formulation of tax administrative regulations and rules are: planning, drafting, verification and promulgation. The four steps mentioned above shall take place in accordance with laws, regulations and rules.

Besides, the laws of China stipulates that within the framework of the national tax laws and regulations, some local tax regulations and rules may be formulated by the People's Congress at provincial level and its Standing Committee, the People' s Congress of minority nationality autonomous prefectures and the People's Government at provincial level. The following table summarises up the current tax laws, regulations and rules and relevant legislation in China.

China's Current Tax Legislation Table

Legislation	Date of issue and issued by	Effective Date
1.Provisional Regulations of the People's Republic of China on Value Added Tax Detailed Rules for Its Implementation	13 Dec. 1993, by State Council 25 Dec. 1993, by Ministry of Finance	1 Jan.,1994 1 Jan.,1994
2.Provisional Regulations of the People’s Republic of China on Consumption Tax Detailed Rules for Its Implementation	13 Dec.1993, by State Council 25 Dec.1993, by Ministry of Finance	1 Jan.,1994 1 Jan.,1994
3.Provisional Regulations of the People’s Republic of China on Business Tax Detailed Rules for Its Implementation 4.Provisional Regulations of the People’s Republic of China on Enterprise Income Tax Detailed Rules for Its Implementation	13 Dec.1993, by State Council 25 Dec.1993, by Ministry of Finance 13 Dec.1993, by State Council 4 Feb.1994, by Ministry of Finance	1 Jan.,1994 1 Jan., 1994 1 Jan.,1994 1 Jan.,1994
5. Income Tax Law of the People's Republic of China on Enterprises with Foreign Investment and Foreign Enterprises Detailed Rules for Its Implementation	9 Apr.1991, by the Fourth Session of the 7th National People's Congress (NPC) 30 Jun.1991, by State Council	1 Jul.,1991 1 Jul.,1991
6.  Individual Income Tax Law of the People's Republic of China Regulations for Its Implementation	10 Sep.1980 passed by the Third Session of the 5th National People’s Congress and revised and re- issued by the Fourth Session of the 8th NPC on 31 Oct.1993 28 Jan.1994, by State Council	1 Jan.,1994 28 Jan.,1994
7.Provisional Regulations of the People’s Republic of China on Resource Tax Detailed Rules for Its Implementation	25 Dec.1993, by State Council 30 Dec.1993, by Ministry of Finance	1 Jan.,1994 1 Jan.,1994
8.Provisional Regulations of the People' s Republic of China on Urban and Township Land Use Tax Detailed Rules for Its Implementation	27 Sep.1998, by State Council to be made by the People' s Government at Provincial Level	1 Nov.,1998
9.Provisional Regulations of the People' s Republic of China on City Maintenance and Construction Tax Detailed Rules for Its Implementation	8 Feb.1985, by State Council to be made by the People' s Government at Provincial Level	the year of 1985
10.Provisional Regulations of the People’s Republic of China on Farmland Occupation Tax Detailed Rules for Its Implementation	1 Apr.1987, by State Council to be made by the People’s Government at Provincial Level	1 Apr.1987
11.Provisional Regulations of the People’s Republic of China on Fixed Assets      Investment Orientation Regulation Tax Detailed Rules for Its Implementation	16 Apr.1987, by State Council 18 Jun., 1991, by the SAT	1991 1991
12.Provisional Regulations of the People' s Republic of China on Land Appreciation Tax Detailed Rules for Its Implementation	13 Dec.1993, by State Council 27 Jan.1995, by Ministry of Finance	1 Jan.,1994 27 Jan.,1995
13.Provisional Regulations of the People’s Republic of China on House Property Tax Detailed Rules for Its Implementation	15 Sep.1986, by State Council to be made by People’s Governments at Provincial Level	1 Oct.,1986
14. Provisional Regulations Governing Urban Real Estate Tax Detailed Rules for Its Implementation	8 Aug.1951, by the Central People’s Government Administration Council to be made by People’s Governments at Provincial Level	8 Aug.,1951
15. Inheritance Tax (to be legislated)
16.Provisional Regulations of the People's Republic of China on Vehicle and Vessel Usage Tax Detailed Rules for Implementation	15 Sep., 1986, by State Council to be made by People ' s Governments at Provincial Level	1 Oct.,1986
17.Provisional Regulations Concerning the Vehicle and Vessel Usage License Plate Tax Detailed Rules for Its Implementation	20 Sep.1951, by the Central Government Administration Council to be made by People’s Governments at Provincial Level	20 Sep.,1951
18.Provisional Regulations of the People’s Republic of China Concerning Stamp Tax Detailed Rules for Its Implementation	6 Aug.1988, by State Council 29 Sep.1988, by Ministry of Finance	1 Oct.,1988 1 Oct.,1988
19.Provisional Regulations Governing Deed Tax Detailed Rules for Its Implementation	7 Jul.1997, by State Council 28 Oct.1997, by Ministry of Finance	1 Oct.1997 1 Oct., 1997
20. Security Exchange Tax (to be legislated)
21.Provisional Regulations Concerning Slaughter Tax (administered by local governments)	19 Dec.1950, by the Central Government Administration Council
22.Provisional Regulations of the People’s Republic of China on Banquet Tax (administered by local governments)	22 Sep.1988, by State Council
23.Provisional Regulations of the People’s Republic of China on Agriculture Tax Detailed Rules for Implementation	3 Jun.1958, by the 96th Session of the Standing Committee of the 1st NPC to be made by the People' s Government at Provincial Level	3 Jun.,1958
24.The Rules of the State Council on Levying Agriculture Tax on Agriculture Specialities Measures for Its Implementation	30 Jan.,1994, by State Council to be made by the People' s Government at Provincial Level	30 Jan.,1958
25. Animal Husbandry Tax: no national legislation	If levied, rules should be made by the provincial governments concerned
26. Regulations of the People ' s Republic of China on Import and Export Customs Duty	7 Mar.1992, by State Council; Second revision by State Council on March 18,1992	1 Apr.1992
27. Rules of Levying Customs Duty on Entry Passengers ' Luggage and Personal Postal Articles	18 May,1994, by the Customs Tariff and Classification Committee of the State Council	1 Jul.,1994
28. Law of the People's Republic of China on Tax Administration and Collection Detailed Rules for Its Implementation	4 Sep.,1992, passed by 27th Session of the Standing Committee of the 7th NPC, and revised and re- promulgated by the 12th Session of the Standing Committee of the 8th NPC on 28 Feb.,1995 4 Aug.,1993, by the State Council	28 Feb.,1995 4 Aug.,1993
29. Supplementary Rules of the Standing Committee of NPC of the People’s   Republic of China on Punishing Tax Evasions and Refusal to Pay Taxes	4 Sep.1992, by the 27th Session of the Standing Committee of the 7th NPC	1 Jan.,1993
30.Measures of the People’s Republic of China on Invoice Management Detailed Rules for Its Implementation	12 Dec.,1993, approved by State Council and issued by Ministry of Finance on 23 Dec., 1993 28 Dec., 1993, by the SAT	23 Dec.,1993 23 Dec.,1993
31. Resolutions of the Standing Committee of NPC of the People’s Republic of China on Punishing Any False Issuance, Forgery and/or Illegal Sales of VAT Invoices	30 Oct.,1995, by the 16th Session of the Standing Committee of the 8th NPC	30 Oct.,1995
32. Rules on Tax Administrative Appealing	6 Nov.,1993, by the SAT	6 Nov.,1993

Note: The provisions of criminal responsibilities in SUPPLEMENTARY RULES OF THE STANDING COMMITTEE OF NPC OF THE PEOPLE'S REPUBLIC OF CHINA ON PENALIZING TAX EVASIONS AND REFUSAL TO PAY TAXES and RESOLUTIONS OF THE STANDING COMMITTEE OF NPC OF THE PEOPLE'S REPUBLIC OF CHINA ON PENALIZING ANY FALSE ISSUANCE, FORGERY AND/OR ILLEGAL SALES OF VAT INVOICES have been integrated into the CRIMINAL LAW OF THE PEOPLE'S REPUBLIC OF CHINA revised and promulgated on 14 March, 1997.

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