China’s Taxation Administration: Legal Liabilities
China’s Taxation Administration: Legal Liabilities
(II) Legal liabilities of withholding agent for violating tax law
A withholding agent refers to an entity or individual that is obligated to withhold or collect taxes from taxpayers and make payment on their behalf in accordance with the law. The legal liabilities of withholding agents for violating tax law mainly include the following.
(1) Where a withholding agent fails to establish and maintain accounting books, vouchers, and related documents for withholding and collecting taxes in accordance with regulations, or fails to submit the withholding and collection reports in accordance with applicable regulations, the tax authority shall order the withholding agent to make corrections within a specified period of time, and may impose a fine of not more than RMB 2,000; In case of severe violation, a fine of not less than RMB 2,000 but not more than RMB 10,000 may be imposed.
(2) If a withholding agent engages in tax evasion, its legal liability is the same as that on a taxpayer for tax evasion;
(3) If a withholding agent fails to withhold or collect taxes that should have been withheld or collected, the tax authority shall recover tax payments from the taxpayer, and impose a fine of not less than 50% but not more than 3 times the amount of tax that should have been withheld or collected on the withholding agent.
Robert Zhang 
Steve Li 