Measures for the Administration of Individual Income Tax

Guo Shui Fa [2005] No.120

Chapter I General Provisions

Article 1 For the purpose of strengthening and regulating the administration on the collection of individual income tax by
tax authorities, promoting the scientific and detailed refined administration on the collection of individual income tax, and
incessantly improving the efficiency and quality of collection administration, the present Measures are formulated in
accordance with the Individual Income Tax Law of the People's Republic of China (hereinafter referred to as the Tax Law),
the Law of the People's Republic of China on the
Administration of Tax Collection (hereinafter referred to as the Tax Collection Administration Law) and the provisions of
other relevant tax laws and regulations.

Article 2 To strengthen and regulate the administration of collection of individual income tax collection, more efforts
shall be put on perfecting the administration system, improving the means of collection administration, and
highlighting the focal points of administration. This means the system of archive management on individual income, the
system of ledgers for withholding tax and payment of withheld tax, system of two-way declaration to tax authorities by
taxpayers and withholding agents, and the system of taxation coordination with the cooperation of all the departments of
society shall be established. A uniform information system for individual income tax management shall be researched,
developed, and then brought into application as soon as possible, and the administration of individual income tax
shall be strengthened by making full use of information technology. Key administration of high- income earners,
administration on the headspring of tax sources, and the administration of all the taxpayers and in full amount shall
be strengthened earnestly.

Chapter II System of Archive Management on Individual Income

Article 3 The system of archive management on individual income shall refer to the system in which the tax authorities
establish archives for each taxpayer recording his/her basic individual information, income and tax payment information as
well as the relevant information as required, and implement dynamic management on it.

Article 4 The administrative departments of all levels of tax authorities at or under the provincial level shall establish
income and tax payment archives for each taxpayer step by step as required, and implement a "One account" dynamic management.

Article 5 The administrative departments of all levels of tax authorities at or under the provincial level shall distinguish
different types of taxpayers and establish the corresponding basic information archives in light of the following contents:
1. The contents of the archive for any employee taxpayer (excluding any shareholder, investor, or foreigner) shall
include: name, type and number of identity certificate,
educational background, occupation, duty, email address,
effective contact telephone numbers, effective address, postal
code, name of work entity, code of withholding agent, and
whether he/she is a key taxpayer or not.
2. The contents of the archive for any non-employee taxpayer
(excluding any shareholders or investors) shall include: name,
type and number of identity certificate, email address,
effective contact telephone numbers, effective address
(address of work entity or home), postal code, name of working
entity, code of withholding agent, and whether he/she is a key
taxpayer or not.
3. The contents of the archive for any shareholder or
investor (excluding any investors of sole proprietorships or
partnerships) shall include: name, nationality, type and
number of identity certificate, effective address, postal
code, permanent residence registration place, effective
contact telephone numbers, email address, total capital stock
(investment) of the company, amount of individual equity
(investment), code of withholding agent, and whether he/she is
a key taxpayer or not.
4. The contents of the archive for a sole proprietorship,
investor of a partnership, small industrial or commercial
businesses or an operator who contracts or leases an
enterprise or institution shall include: name, type or number
of identity certificate, name of small industrial or
commercial businesses(or sole proprietorships, partnerships,
enterprise or institution under contract or tenancy), type of
economy, industry, business address, postal code, effective
contact telephone number, number of tax registration
certificate, email address, ways of collecting individual
income tax (verification or account checking), competent tax
authorities, and whether he/she is a key taxpayer.
5. The contents of the archive for any foreigner (including
both employees and non-employees) shall include: code of
taxpayer, name (both in Chinese and English), gender, place of
birth (both in Chinese and English), year and month of birth,
overseas address (both in Chinese and English), nationality or
region, type or number of identity certificate, residence
permit number (number of the certificate of Taiwan
compatriots, number of Home-visiting Certificate), number of
the certificate of labor and employment, occupation, domestic
position, overseas position, time of entry, tenure, estimated
time for staying in China, estimated time for leaving China,
name of working entity of the foreigner in China and the
number of tax registration certificate of the entity, address
of his/her working entity, postal code, contact telephone
numbers, name of other working entities (include the address,
telephone numbers, and ways of contact) and number of tax
registration certificate, name of the entity where the
foreigner is engaged or with which the foreigner signs a
contract and number of the tax registration certificate
thereof, address, postal code, contact telephone numbers, name
and address of his/her overseas entity (both in Chinese and
English), place of payment (including whether it is paid at
home or overseas), and whether he/she is a key taxpayer.
Article 6 The contents of a taxpayer's archive shall be
originated from:
1. Information on tax registration of the taxpayer.
2. Report Form of for the Withholding of Individual Income
Tax and the List Ledgers of Payment of Individual Income.
3. Receipt of tax withholding and collection.
4. Individual income tax return form.
5. Relevant information provided by public departments of the
society.
6. Information on tax payment inspection by tax authorities
and penalty records thereof. And
7. Other materials mastered by tax authorities and other
information materials provided by the taxpayer.
Article 7 The tax authorities shall duly renew and adjust the
contents of the archives, and shall, according to the reality
of the level of local informatization and the improvement of
the ability of tax collection administration, the changes of
individual incomes, and etc., incessantly enlarge the scope of
archive management, until the goal of the administration of
all the taxpayers and in full amount is achieved.
Article 8 The tax authorities shall make full use of the
archival materials of taxpayers to strengthen the
administration on individual income tax. It shall make
comparison, analysis and tax payment assessment on individual
archival materials of key taxpayers, key industries and
enterprises periodically to find out the conditions for any
change of tax sources and the reasons thereof, discover any
abnormal condition in time, and take measures to plug up the
leaks loopholes in the administration of tax collection.

Chapter III System of Ledgers for Withholding Tax and Payment
of Withheld Tax
Article 9 The system of ledgers for withholding tax and
payment of withheld tax shall refer to the system in which the
tax authorities require demand the withholding agents to
submit all the basic information as required on the
individuals whose income is paid by the withholding agents,
the detailed information on the payment of individual income
and the withholding of tax and other tax-related information
in accordance with the Individual Income Tax Law and the other
relevant provisions, and set up archives for each withholding
agent, so as to lay a foundation for conducting dynamic
management afterwards.
Article 10 The tax authorities shall, according to the tax
law and the other relevant laws and regulations, supervise and
urge the withholding agents to set up ledgers for withholding
tax and payment of withheld tax as required, so as to
correctly reflect the condition on withholding of individual
income tax.
Article 11 The tax authorities shall strictly examine and
verify the tax payment materials filed by the withholding
agents. Where any withholding agent fails to fill in each
column and each item of the Report Form for Withholding
Individual Income Tax and the Subsidiary Ledgers of Payment of
Individual Income by person, or the contents filled in are
incomplete, the competent tax authorities shall require the
withholding agent to fill them in once again. Where
information management has been implemented, the tax
authorities may incorporate the Subsidiary Ledgers of Payment
of Individual Income into the Report Form for Withholding
Individual Income Tax.
The Report Form for Withholding Individual Income Tax shall be
filled in with the information on the taxpayers who have
actually paid individual income tax; and the Subsidiary
Ledgers of Payment of Individual Income shall be filled in
with the information of the taxpayers who have paid taxable
income but have not reached the threshold of tax payment
standard.
Article 12 The tax authorities shall make cross comparison of
the payment of individual income submitted by the withholding
agents and their financial statements of the same period, and
shall, upon finding any inconformity, require them to make an
explanation, make an investigation and handle according to
law.
Article 13 The tax authorities shall set up archives for each
withholding agent, the contents of the archives shall include:
the code of the withholding agent, name of the withholding
agent, number of tax registration certificate, telephone
number, email address, industry, type of economy, address of
the entity, postal code, name and contact telephone number of
the legal representative (person-in-charge of the entity) and
the finance executive, tax registration organ, type of
registration certificate or license, date of license issuance,
competent tax authority, amount of taxable income (classified
and collected according to the items type of income), income
from subject to tax exemption, taxable amount (classified and
collected according to the items type of income), number of
taxpayers, amount of tax having been paid, amount of tax to be
made up or refunded, amount of tax deducted or exempted,
surcharge for overdue payment, fines, and number of tax
payment receipt, and etc..
Article 14 The contents of the archive of a withholding agent
shall be originated from:
1. Information on the registration of tax withheld by the
withholding agent.
2. Report Form of for the Withholding of Individual Income
Tax and the Subsidiary Ledgers of Payment of Individual
Income.
3. Receipt of tax withholding and collection.
4. Relevant information provided by public departments of the
society.
5. Information of tax payment inspection by tax authorities
and penalty records thereof. And
6. Other materials mastered in the control of by the tax
authorities.

Chapter IV System of Two-way Declaration to Tax Authorities by
Taxpayers and Withholding Agents
Article 15 The system of two-way declaration to tax
authorities by taxpayers and withholding agents shall refer to
the system in which a taxpayers and his withholding agents
shall, according to the provisions of any law or
administrative regulation, and the request put forward by tax
authorities according to any law or administrative regulation,
file tax returns to the competent tax authority respectively,
and the tax authority shall make cross comparison and checking
on the information of income and tax payment respectively
provided by the taxpayers and the withholding agents.
Article 16 Where a taxpayer shall file a tax return by
himself/herself as prescribed by tax law and its
implementation regulation and as well as the other relevant
laws and regulations, the tax authority shall require him/her
to file a tax return to the competent tax authority by
himself/herself.
Article 17 When a tax authority accepts the tax return of a
taxpayer or withholding agent, a preliminary examination and
approval shall be made on the time limit for filing the tax
return, the taxable items, applicable tax rate, computation of
tax and the integrity and accuracy of the relevant materials.
Where discovering any mistake, require the taxpayer or
withholding agent to correct the tax return in timely.
Article 18 The tax authorities shall make a cross comparison,
and assessment and analysis on the contents of the two-way
declaration to find out if there exists any problem and handle
such problem, if any, according to law in time.

Chapter V System of Taxation Coordination with the Cooperation
of All the Departments of Society
Article 19 The system of taxation coordination with the
cooperation of all the departments of society shall refer to
that the tax authorities shall establish a system of
coordination and cooperation among all the departments
relating to individual income and the administration of
individual income tax collection, and master the tax sources
and the relevant information on tax payment in timely, as well
as formulate and implement measures for taxation coordination
and taxation protection together, so as to form a network of
taxation coordination and taxation protection of society.
Article 20 The tax authorities shall lay emphasis on
strengthening coordination and cooperation with the following
departments: public security, procuratorate, court, industry
and commerce, bank, culture and physical health, finance,
labor, housing administration, communications, auditing, and
foreign exchange control, and other departments.
Article 21 The tax authorities shall, through strengthening
coordination and cooperation with the relevant departments,
lay emphasis on mastering the relevant information about the
income of taxpayers.
1. Contacting with the departments of public security to
inquire about the conditions on the entry and exit of any
individual who has no domicile in China and his/her residence
and staying in China, and implementing the system of
preventing the person who owes tax from exiting the territory,
and mastering the information about the purchase of vehicles
by the person, and other information.
2. Contacting with the department of industry and commerce to
inquire about the changes of the registration of taxpayers,
and the changes of shareholders and the capital stock of joint
stock companies.
3. Contacting with the department of culture and physical
health to master the information about the various
performances and competitions, and etc., and to put into
effect the obligations of the performance undertaking entities
and the entities of physical health on withholding taxes and
other information.
4. Contacting with the department of housing administration
to inquire about the purchase and, sale and tenancy of houses,
and other information.
5. Contacting with the department of communications to
inquire about the conditions on gather information about
taxies and freight trains vehicles and their operations. And
6. Cooperating with the department of labor to inquire about
the labor and employment of individuals who have no domiciles
in China.
Article 22 The Tax authorities shall actively create
conditions to realize the sharing or periodical exchange of
relevant information with the other relevant departments.
Article 23 The tax authorities at all levels shall attach
high importance to making great efforts to publicize and
popularize knowledge of individual income tax law and to
incessantly improving the consciousness of citizens for paying
tax according to law, and take it as a long-term fundamental
work and put it into the important agenda, and shall, in
combination with the requirements for the work of
administration of tax collection, the hot spots paid which
draw the attention to the society and the focal points of the
local administration of tax collection, strengthen close
cooperation with the said departments. The tax authorities
shall formulate a thorough plan for the publicity work, make
full use of various publicity media and means, and make
publicity on individual income tax by taking flexible and
various ways.
Chapter VI Accelerating Information System Construction
Article 24 The tax authorities at all levels shall, within
the general framework of the Phase III of the Golden Tax
Project, and in light of the requirements of "Integration" and
the principle of "Planning as a whole, unifying the standard,
giving prominence to the keynote, implementing by
distribution, integrating the resources, paying attention to
the actual effect, strengthening administration and ensuring
the safety", accelerate the information system construction on
the administration of individual income tax collection, so as
to improve the quality and efficiency of the administration of
individual income tax collection.
Article 25 According to the requirements of integrated
construction, the core business system sectors of the tax
agencies shall develop software uniformly for the common part
of the individual income tax that are of the same nature as
and other types of tax, and software shall be developed
independently for the part of individual income tax with
special characteristics. The State Administration of Taxation
shall, according to the characteristics of individual income
tax, develop in advance such two subsidiary systems as the
system of withholding individual income tax and payment of
withheld individual income tax (the terminal of withholding
agents) and the basic information management system (the
terminal of taxation).
Article 26 The requirements for the system of withholding tax
and payment of withheld tax (the part of withholding agents)
shall be:
1. Providing a convenient and fast tool for withholding
agents to file tax returns;
2. Being capable of transmitting the relevant information
from the existing finance software and other software of the
withholding agents;
3. Computing tax automatically, and creating the various
report forms automatically;
4. Supporting multiple ways of filing tax returns;
5. Facilitating the withholding agents to make statistics,
consulting searches and printings;
6. Providing the function of printing the Receipt of Tax
Withholding and Collection; and
7. Being convenient for tax authorities to accept the
detailed withholding declaration of withholding agents, and
accurately master the basic data completely.
Article 27 The requirements for the basic information
management system (the terminal of taxation) shall be:
1. Establishing "One account" archives for tax payment of
individual income to collect the materials concerning the
basic information and information on income and tax payment of
withholding agents and taxpayers.
2. Transmitting the information on the income obtained by an
individual in more than two places and the tax payment
information thereof to the link of administration of tax
collection.
3. Sorting out from the "One account" archives the high
income earners, high income industries, key taxpayers, and key
withholding agents and implementing key administration on
them.
4. Determining the truthfulness of the tax returns filed by
taxpayers through collecting and comparing the information
relating to the income and tax payment of taxpayers.
5. Providing decision-making support for strengthening
administration on individual income tax and improving policies
through establishing various kinds of statistical indexes,
calibers and by using statistical results.
6. Establishing data application links with each department
to provide information on the collection of other tax. And
7. Printing the Tax Payment Receipt on Individual Income Tax
of the People's Republic of China to provide taxpayers with
the basis of tax payment.
Article 28 The tax authorities at the provincial level shall
do a good job in integrating the existing software on the
administration of individual income tax collection. The tax
authorities at or under the provincial level shall no longer
develop any software on the administration of individual
income tax collection themselves in principle.

Chapter VII Strengthening Key Administration on High Income
Earners
Article 29 The tax authorities shall bring the following
personnel into the scope of key taxpayers: personnel in such
high -income industries as finance, insurance, securities,
electric power, telecommunications, oil, petrol-chemical,
tobacco, civil aviation, railways, real estates, schools,
hospitals, urban water supply and gas supply, publishing
companies, road management, foreign-funded enterprises and
foreign enterprises, high and new technology enterprises,
intermediary agencies, physical training club, and etc.;
individuals with high income such as investors of private
economic sectors, film or television stars, singers, sports
stars, and models, and etc.; and personnel temporarily coming
to China to make performances.
Article 30 The tax authorities at all levels shall single out
certain individuals as key taxpayers from the following
personnel to implement key administration:
1. Personnel who have higher income;
2. Personnel who are more famous;
3. Personnel who have more channels of income sources;
4. Personnel who have more items of income;
5. Professionals with no fixed entity employer; and
6. Personnel who have great influence on the administration
of tax collection.
Article 31 The tax authorities at all levels shall implement
rolling dynamic administration measures to key taxpayers, and
shall, according to the reality of their localities, subjoin
key taxpayers duly at an appropriate time each year, and
incessantly enlarge the scope of administration on key
taxpayers, until they realize the administration of all the
taxpayers and in full amount.
Article 32 The tax authorities shall set up special archives
for key taxpayers, and implement key administration, and
follow up the changes of their income and tax payment at any
time.
Article 33 The tax authorities at all levels shall make full
use of the information on key taxpayers they mastered through
archival administration, and make comparison, assessment and
analysis on the income and tax payment of key taxpayers
periodically so as to discover unexpected problem
abnormalities and take measures to plug up the leaks in the
administration in time.
Article 34 The tax authorities at the level of provinces
(including cities under separately state planning) shall,
before the end of July each year and the end of January of the
next year, have report the basic information and the income
and tax payment of key taxpayers determined in the half year
and the whole year respectively filling in the Form of
Collection on the Income and Tax Payment of Key Taxpayers of
Individual Income Tax by in Excel form and submitted to the
State Administration of Taxation (Department of Income Tax
Administration).
Article 35 The tax authorities at all levels shall strengthen
their administration on the collection of individual income
tax of investors of small industrial or commercial businesses,
sole proprietorships and partnerships and that of the
individuals independently undertaking labor service
activities.
1. Actively promoting the work for of establishing accounts
for small industrial or commercial businesses, sole
proprietorships and partnerships, so as to regulate the
finance accounting management and improve the finance
accounting system; in areas where there are conditions permit,
fiscal tax-control devices shall be used to strengthen
administration and monitoring on taxpayers.
2. Perfecting and improving the work of verification of tax
collection, and implementing verification on tax collection to
taxpayers that have no complete accounts and certificates
vouchers and to whom tax collection through checking account
is not available, and making ration adjustment to the amount
in time according to the management conditions of the
taxpayers.
3. Strengthening coordination and cooperation of the taxation
system agencies to realize the sharing of information,
establishing and perfecting the system of individual income
tax information exchange and coordination in the tax
collection inspection at different places to exchange
information, so as to solve the difficulty in monitoring
problem that one investor invests and obtains incomes from two
or more places but pays taxes by combining the incomes
together
4. Strengthening administration of individual investors who
borrow money from the enterprises they invest, and collecting
taxes in strictly accordance with the relevant provisions on
loans with the a term of more than one year but failing to be
used for the production of the enterprises concerned.
5. Making strict management on the pretax deduction on the
enterprises invested by individuals and the small industrial
or commercial businesses and making inspections periodically.
And taxes shall be strictly collected as required in a strict
way on expenditures for the consumption or property
expenditures that have nothing to do with the production and
management, which are paid by individual investors with the
money of the enterprise capital for themselves, members of
their families and other relevant personnel. And
6. Strengthening the administration of tax collection on
labor remunerations of such personnel who undertake
performances, advertisements, teaching and giving medical
treatments, and pushing in an all-round way the measures for
pre-deduction and pre-payment, and strengthening
administration on tax collection from the sources.
Article 36 The tax authorities shall strengthen special
inspections on key taxpayers and independent taxpayers, and
severely strike crack down tax-related illegal and criminal
acts. Each locality shall expose openly two or three illegal
or criminal cases in respect of individual income tax through
relevant media each year.
Article 37 The tax authorities shall attach importance to and
strengthen the routine inspection of individual income tax of
key taxpayers and independent taxpayers so as to discover
leaks and weak links in the administration of tax collection
in time, and shall formulate and perfect systems and measures
for the administration of tax collection. The routine
inspections shall be organized and implemented jointly by the
department of tax collection administration and the department
of taxation affairs policies of the tax authorities under the
provincial level.
A plan shall be made to implement routine inspections, which
shall be carried out as required according to the prescribed
procedures, so as to prevent multiple and repeated
inspections, and avoid affecting the production operations of
taxpayers.

Chapter VIII Strengthening the Administration on the
Headspring of Tax Sources
Article 38 The tax authorities shall strictly carry into
effect the system of tax registration administration, and
earnestly carry out the work for the cleanup of those accounts
that escaped from tax administration, so as to find out the
real situation of the accounts.
Article 39 The tax authorities shall establish and perfect
the archives of taxpayers and withholding agents in light of
the relevant requirements, and earnestly strengthen
administration on the sources of individual income tax.
Article 40 The tax authorities shall continue doing a good
job in the tax withholding, so as to improve the quality and
level of tax withholding:
1. Continuing implementing the existing rules and measures
for the work of withholding individual income tax, and
improving and perfecting them incessantly in practice.
2. Making cleanup and finding out the real situations of all
the administrative entities, enterprises and public
organization within their own districts jurisdictions, and
establishing on this basis the ledgers or basic accounts for
withholding agents in light of the indexes for the
administration of tax payment archives, so as to implement
follow-up administration on them.
3. Pushing forward the system of detailed filing of tax
returns on the detailed individual incomes paid by withholding
agents in cooperation with the administration on all the
taxpayers and in full amount.
4. Implementing key tax sources administration on the
following industries: finance, insurance, securities, electric
power, telecommunications, oil, petrol-chemical, tobacco,
civil aviation, railways, real estates, schools, hospitals,
water and gas supply in the cities, publishing companies, road
management, foreign-funded enterprises, high and new
technology enterprises, intermediary agencies, physical club
and other high income industries; entities of tax withholding
that have zero declaration in three consecutive years
(including three years)(hereinafter referred to long-term zero
declaration entities).And
5. Having the industries and entities subject to key tax
source administration and the long-term zero declaration
entities listed as the key objects subject to the annual
special inspection, or implementing key examination and
approval on their tax return materials.
Article 41 The tax authorities at all levels shall make full
use the coordination system with the cooperation of all
departments, and obtain information on tax sources from such
public departments of the society government as public
security, industry and commerce, bank, culture, physical
training, real estate administration, labor, foreign exchange
control, and etc..
Article 42 The tax authorities at all levels shall strengthen
administration on tax sources and make assessment on tax
payment by making use of the information obtained from other
relevant departments. The tax authorities shall analyze the
changes of tax sources periodically, and shall, for greater
significant changes and other abnormal conditions, analyze the
reasons in time and take corresponding administration
measures.
Article 43 The tax authorities at all levels shall, on the
basis of strengthening the work for tax collection through
checking accounts, and for the circumstances that comply with
the provisions of Article 35 of the Tax Collection
Administration Law, verify the collection of individual income
tax through periodical collection of fixed amounts of taxes at
fixed time and verification of verifying the proportion of
collection of taxable income rate, and other reasonable
methods.
The taxable sales volume of any small industrial or commercial
business that is subject to the administration of two or more
tax authorities shall be verified by the State Administration
of Taxation.
Article 44 The competent tax authorities shall, after
determining the ways of verification the tax collection of
taxpayers, make investigation through selecting typical
accounts that are of representative value, and determine the
taxable amount on this basis. The coverage of typical
investigation shall be no lower than 3% of the taxpayers
subject to verification of tax collection.

Chapter IX Strengthening Administration on All the Taxpayers
and in Full Amount
Article 45 The administration on all the taxpayers and in
full amount shall refer to all the individuals who have
obtained taxable income, shall have place all their incomes
obtained brought into the administration of tax authorities
through withholding or filing a tax returns himself/herself,
no matter whether the amount of income has reached the
standard threshold for payment of individual income tax or
not.
Article 46 The tax authorities at all levels shall, in light
of the principle of "the withholding agents first, and then
the taxpayers; the key industries, enterprises and taxpayers
first, and then the ordinary industries, enterprises and
taxpayers", and "registering all the individuals that have
taxable income first, and then regulating", promote the work
for the administration of all the taxpayers and in full amount
in an active and steady way.
Article 47 The tax authorities at all levels shall, according
to the legal provisions and requirements, establish the system
of archival management on individual income as soon as
possible, the system of ledgers for withholding taxes and
payment of withheld taxes, the system of two-way declaration
to tax authorities by taxpayers and withholding agents, and
the system of taxation coordination with the cooperation of
all the public departments of society, so as to lay a
foundation for implementing the administration of all the
taxpayers and in full amount.
Article 48 The tax authorities at all levels shall positively
create conditions, and shall, in light of the general plan of
the Phase III of the Golden Tax Project and other relevant
requirements, and depending on computerized means of
information system, realize the administration of filing tax
returns by all the taxpayers and in full amount gradually, and
shall, issue tax payment receipts (certificates) for each
taxpayers on this basis.
Article 49 The tax authorities shall, by making full use of
the information of taxpayers and withholding agents,
information on tax source monitoring, and the information
provided by the relevant departments and media, as well as the
information collected on site by tax collection management
personnel, and etc. as are mastered in the process of
administration of all the taxpayers and in full amount, and in
accordance with the provisions of relevant state laws,
policies and regulations, make analysis and judgment on the
truthfulness and accuracy of tax returns filed by taxpayers
who file the tax returns themselves and the conditions of tax
withholding by withholding agents, and carry out assessment on
tax payment of individual income tax, so as to improve the
quality of administration of all the taxpayers and in full
amount.
Article 50 The tax authorities shall strengthen the work for
basic information and administration of tax sources of sole
proprietorships, investors of partnerships, small industrial
or commercial businesses, independent laborers and other
independent taxpayers who have no withholding agents.
Article 51 The assessment on the payment of individual income
taxes shall be conducted in way of "combining people manual
with computerized administration", and the basic principles
and procedures shall be: a tax payment assessment and analysis
system shall be established according to the level of income
of local residents and the changes thereof, the level of
industrial income and the changes thereof, and other relevant
factors that may affect individual income tax; the key objects
of tax payment assessment shall be determined according to the
increase and decrease of revenue income, the rate of increase
and decrease or the average index model of certain industries;
tax payment assessment objects shall be made specific
assessment and analysis, the concrete factors that have
brought about the changes of the individual income tax of the
withholding agents or the taxpayers shall be find out and lock
focus on, and on this basis, an appointment shall be made to
the objects subject to the assessment and talk with them,
asking them to make explanations and correct the mistakes, or
handle them over to the auditing departments to conduct
auditing, and make follow-up key management.
Article 52 The tax authorities shall collect information on
tax payment assessment in light of the following scope and
sources:
1. Scope of information collection
(1) The level of annual and monthly average wages of local
employee;
(2) The level of annual and monthly average wages of local
employee of different the specific industries;
(3) The local profit rate of capitals of different the
specific industries;
(4) The relevant data of the financial statements of the
enterprises;
(5) The distribution of dividends and bonuses by joint stock
companies; and
(6) Other relevant data.
2. Sources of information collection
(1) Relevant information of taxation registration;
(2) Relevant information of tax returns;
(3) Relevant information of the accounting reports;
(4) Relevant information of fiscal tax control devices;
(5) Information of the auditing reports and assessment
reports issued by intermediary agencies;
(6) Information provided by relevant departments and media;
(7) Information collected by taxation management personnel by
acquainting themselves with and collecting directly form the
taxpayers themselves; and
(8) Relevant information collected by other means on
taxpayers and withholding agents relating to the
administration f individual income tax collection.
Article 53 The tax authorities shall set up tax payment
analysis indexes, financial analysis indexes and indexes for
the assessment and analysis of bad records of industries and
taxpayers, and determine through analyzing the key industries,
key enterprises and major groups whose general tax sources of
individual income tax increase or decrease in a certain
period, so as to determine the key objects for tax payment
assessment. The Measures for the Administration of Tax Payment
Assessment (For Trial Implementation) of the State
Administration of Taxation and the relevant provisions shall
be followed in implementing the procedures, indexes, and
methods for the assessment of individual income tax payment.
Article 54 The assessment of payment of individual income tax
shall be conducted mainly from the following items:
1. Incomes from wages and salaries. The analysis shall be
focused on the comparison of the rate of increase and decrease
of the total wages with the rate of increase and decrease of
taxes under this item, the comparison of the rate of increase
and decrease of average wages per person with the rate of
increase and decrease of taxes under this item, the comparison
and analysis on the rate of increase and decrease of taxes
with the rate of increase and decrease of enterprise
profitability, and the comparison and analysis on the income
and tax payment of the personnel in the same industry and the
same posts.
2. Income from interests, dividends and bonuses. The analysis
shall be focused on the comparison of the taxes under this
item in the current year with those in the same period in the
previous year, the comparison on the rate of increase and
decrease of taxes under the item and the rate of increase and
decrease of enterprise profitability, the condition on the
increase of individual equity by enterprises and the post-tax
distribution of profits by enterprises after tax.
3. Income from the production and operation of small
industrial or commercial businesses (including sole
proprietorships and partnerships). The analysis shall be
focused on the comparison of the taxes under this item in the
current year with those in the previous year, the comparison
of the rate of increase and decrease of taxes under this item
with the rate of increase and decrease of enterprise
profitability; whether the items deducted before tax comply
with the provisions of the existing policies or not; whether
there is zero declaration in several consecutive months or
not; and the comparison of the tax burden on the income from
the production and management of small industrial or
commercial businesses in the same industry and at the same
area.
4. Income from the contracting management and leasing
management of enterprises and institutions. The analysis shall
be focused on the comparison of the taxes under this item in
the current year with those in the previous year, the
comparison on the rate of increase and decrease of tax under
this item with the rate of increase and decrease of the
enterprise profitability, and the proportion of the profit
rate of the industry, and the proportion of tax payment to the
total profits; whether it there is zero declaration in several
consecutive months or not; the comparison of the tax burden on
the income from contracting management and leasing management
of the enterprises and institutions in the same industry at
the same area.
5. Income from labor remunerations. The analysis shall be
focused on the comparison of the incomes presently obtained by
taxpayers with that obtained in the past, the terms and
conditions of the contract, agreement and projects on paying
the labor service remunerations, and labor remunerations paid
by an entity in blank notes. And
6. Appraisal and analysis on other various incomes shall be
conducted in combination with the reality of administration of
individual income tax collection by selecting pertinent
assessment indexes.

Chapter X Supplementary Provisions

Article 55 The measures for the administration of individual
income tax on incomes from interests of savings and deposits
shall be formulated separately.

Article 56 In case any previously promulgated provisions are
inconsistent with the present Measures, the present Measures
shall prevail.

Article 57 The tax laws, regulations and the relevant
provisions shall be followed for any matter not covered in the
present Measures.

Article 58 The power to interpret the present Measures shall
remain with the State Administration of Taxation. The
administrations of taxation of all the provinces, autonomous
regions, municipalities directly under the Central Government,
and cities under separate state planning may formulate
specific implementing opinions according to the present
Measures.

Article 59 The present Measures shall be implemented as of
October 1st, 2005.

Bright Jon,  Attorney-at-law   Fax: +86-512-53516040   email@colaw.cn
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