China’s Taxation Administration: Legal Liabilities
(I) Legal liabilities of taxpayers for violating tax law
1. Legal liabilities of taxpayers for violating tax administration regulations
Taxpayers' violations of tax administration regulations mainly include violations of regulations on tax registration, accounting management, and tax declaration. In case of a taxpayer's violation of the regulations on tax registration or accounting management, the tax authority may order the taxpayer to make corrections within a specified period of time, and impose a fine of no more than RMB 2,000 if the taxpayer fails to make corrections within the specified period, or a fine of more than RMB 2,000 but no more than RMB 10,000 in case of any serious consequence arising therefrom. In case of a taxpayer's violation of the regulations on tax declaration, the tax authority may order the taxpayer to make corrections within a specified period of time, and may also impose the same fines as in the former case.
2. Legal liabilities of taxpayers for violating tax collection regulations
The legal liabilities of taxpayers for violating tax collection regulations mainly include the following.
(1) Tax evasion. Tax evasion refers to a taxpayer's failure to pay or underpaying the tax payable by forging, altering, concealing, or destroying accounting books or vouchers without authorization, overstating expenses or omitting or understating income on the accounting books, or refusing to declare taxes after being notified by the tax authorities, or making false tax declarations. If tax evasion does not constitute a crime, a fine of 50% to 5 times the amount of evaded tax shall be imposed, in addition to recovering the evaded tax and late fee; If it constitutes a crime, criminal liability shall be incurred in accordance with the law.
(2) Tax debt. Tax debt refers to a taxpayer's failure to pay or underpaying the tax payable after the expiration of the tax payment period. In such a case, the tax authority shall order the tax debtor to make payment within a specified period of time and impose a late fee. If the payment has not been made within the specified period, a fine of no more than 5 times the amount of tax not paid or underpaid shall be imposed, in addition to taking mandatory measures to recover the tax debt. If the tax debtor transfers or conceals property, which makes it impossible for the tax authority to recover the tax, it constitutes an act of obstructing the recovery of overdue tax. If it does not constitute a crime, a fine of 50% to 5 times the amount of the tax debt shall be imposed, in addition to recovering the tax debt and late fee; If it constitutes a crime, criminal liability shall be incurred in accordance with the law.
(3) Tax resistance. Tax resistance refers to the act of refusing to pay taxes by violence or threat. If tax resistance does not constitute a crime, a fine of 50% to 5 times the amount of the resisted tax shall be imposed, in addition to recovering the tax; If it constitutes a crime, the actor shall be sentenced to detention or imprisonment, and a fine shall also be imposed.
(4) Tax fraud. Tax fraud refers to the act of defrauding the State of export tax rebate. If it does not constitute a crime, the export tax rebate shall be recovered, and a fine of not more than 5 times the amount of the export tax rebate obtained shall be imposed; If it constitutes a crime, criminal liability shall be incurred in accordance with the law.
Practising lawyers
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Robert Zhang
An international lawyer registered in Shanghai, China. Master's degreePublish…
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Steve Li
An international lawyer registered in Shanghai, China. Master's degreePublish…
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