Provisional Measures on Administration of Certified Tax Agents
CHAPTER I — GENERAL PRINCIPLES
Article 1. These Measures are formulated in accordance with the provisions of the Law of the People’s Republic of China on Administration of Tax Levying and Collection and its implementation regulations and relevant laws and administrative regulations for the purposes of strengthening administration of certified tax agents, exhibiting tax-related and certification functions of certified tax agents in market economy activities, safeguarding tax collection interests of the State and protecting the legitimate rights and interests of taxpayers.
Article 2. Certified tax agents are professionals who have obtained a practising certificate of certified tax agent in the People’s Republic of China to engage in tax-related services and certification business.
Article 3. Tax firms are social intermediaries duly established to engage in tax-related services and certification business stipulated in the laws, rules and regulations. Certified tax agents shall practise with a law firm.
Article 4. Acceptance of engagement by certified tax agents and tax firms shall be subject to the prerequisite of willing engagement by the client, be based on the relevant laws, rules and administrative regulations and be protected by the law.
Article 5. Practising certified tax agents and tax firms shall comply with the principles of independence, objectivity, fairness and honesty and observe professional ethics and code of practice.
Article 6. The State Administration of Taxation and tax bureaux of all provinces, autonomous regions, centrally-administered municipalities and municipalities with independent planning (hereinafter referred to as the “provincial tax bureaux”) shall be the industry administration for certified tax agents and shall appoint their respective management centres for certified tax agents (hereinafter referred to as the “management centre of the SAT” and “management centres of provincial bureaux” respectively) to exercise administration over certified tax agents and tax firms and to supervise and guide the associations of certified tax agents.
Article 7. All levels of tax authorities shall support practising certified tax agents and tax firms in accordance with the law and provide information on tax collection policies and business guidelines promptly. Tax authorities shall accept applications of tax firms for undertaking of tax-related businesses. Tax authorities shall recognise tax-related certification reports issued by tax firms engaging in tax-related certification business in accordance with the relevant provisions.
Tax firms and certified tax agents shall bear legal liability for issuance of certification reports and other practice activities.
Tax authorities shall strengthen supervision and inspection of the practice of tax firms and certified tax agents.
CHAPTER II — QUALIFYING EXAMINATION AND FILING OF PRACTISING CERTIFIED TAX AGENTS
Article 8. Qualifying examination for practising certified tax agents shall be implemented based on a nation-wide examination system of unified outline, questions setting and organisation. Nation-wide unified examinations shall in principle be held once a year. Detailed measures on examination shall be formulated jointly by the Ministry of Personnel and State Administration of Taxation.
Article 9. Chinese citizens (including residents of Hong Kong Special Administrative Region and Macau Special Administrative Region) who satisfy the enrolment qualification stipulated in the examination measures may apply to participate in the qualifying examination for practising certified tax agents; personnel employed in economics, accounting, statistics, audit, law and other senior level professional positions and engaging in tax collection work for two years may be exempt from certain examination subjects.
Article 10. Personnel who have passed an examination and obtained the “Certificate of Certified Tax Agent Practising in the People’s Republic of China” (hereinafter referred to as the “practising certificate”) shall present the practising certificate to complete filing formalities with the respective management centre of provincial bureau. The management centres of provincial bureaux shall examine and grant filing of practice record for tax firms which are in practice for two years and affix the “filing of practice record” seal in the “remarks” column of the certificate; tax firms which are in practice for less than two years or tax firms which are temporarily not practising shall be granted filing of non-practice record and the “filing of non-practice record” shall be affixed in the “remarks” column of the certificate.
Article 11. Under any of the following circumstances, filing of practice record shall not be granted:
(1) the applicant has no civil capacity or limited civil capacity;
(2) the applicant was subject to criminal punishment and a period of three years has not lapsed upon completion of execution of punishment;
(3) the applicant has been removed from civil office and a period of two years has not lapsed since the date of removal;
(4) the applicant has committed an illegal act when engaging in tax-related and certification business and a period of two years has not lapsed since the date of punishment decision;
(5) the applicant has committed an illegal act when engaging in tax-related and certification business and a period of one year has not lapsed since the date of punishment decision; and
(6) other circumstances stipulated by the State Administration of Taxation.
Article 12. The filing of practice records for the following certified tax agents shall be cancelled:
(1) he/she has passed away or is missing;
(2) he/she is practising in two or more tax firms at any one time;
(3) he/she has committed an illegal act when engaging in tax-related and certificate business;
(4) he/she has failed an annual inspection or refuses to undergo annual inspection within the stipulated period;
(5) he/she has violated the industry management norms and has poor practice record for two consecutive years; and
(6) other circumstances stipulated by the State Administration of Taxation.
Article 13. The management centres of provincial bureaux shall report status of filing by certified tax agents within the locality to the management centre of SAT. Filing of practice records and cancellation of filing records by certified tax agents shall be announced to the public. Measures on public announcement shall be formulated separately.
CHAPTER III — RIGHTS AND OBLIGATIONS OF CERTIFIED TAX AGENTS
Article 14. Practising certified tax agents shall enjoy the following rights:
(1) enquire with tax authorities on tax collection laws, rules, regulations and other regulatory documents;
(2) request the client to provide tax-related information (including electronic data) such as accounting and business information and other necessary assistance; and
(3) give comments and revision suggestions to tax authorities on issues pertaining to tax collection policies; give criticism on illegal acts or disciplinary violations of tax authorities and tax officers or provide feedback to the higher-level authorities.
Article 15. Practising certified tax agents shall accept appointments by tax firms and shall not undertake business on their own.
Article 16. Certified tax agents shall sign and affix seal on tax-related documents issued to external parties and shall be responsible for the truthfulness and lawfulness of such documents.
Article 17. Certified tax agents who discover in the course of practice that their clients have committed an illegal act which may affect the fairness and honesty of the verification report shall advise them against such act; where the advice is not heeded, the certified tax agent shall terminate the service.
Article 18. Certified tax agents shall keep commercial secrets of their clients confidential.
Article 19. Certified tax agents shall guide and verify the work of support personnel and be responsible for their work results.
Article 20. A certified tax agent who has an interested relationship with his/her client shall withdraw from handling the case; the client shall have the right to demand that an interested certified tax agent withdraws from the case.
Article 21. Certified tax agents shall upgrade their professional knowledge required for their practice, raise the standard of practice and undergo follow-up education and training in accordance with the provisions.
CHAPTER IV — SCOPE OF BUSINESS AND RULES
Article 22. Certified tax agents may engage in provision of tax registration, tax payment, tax refund, filing of return for tax exemption and reduction, setting up of accounts and bookkeeping, application for confirmation of status of general taxpayer of value-added tax, use of the shared services of main system to issue special value-added tax invoices for general taxpayers of value-added tax, preparation of tax-related documents and commencement of tax advisory (consultancy), tax collection planning, tax-related training and other tax-related businesses.
Article 23. Certified tax agents may undertake the following types of tax-related certification business: (1) authentication of tax return for consolidated filing and settlement of enterprise income tax;
(2) certification of enterprise’s pre-tax made-up losses and asset losses; and
(3) other tax-related certification businesses stipulated by the State Administration of Taxation and provincial tax bureaux.
Article 24. A practising certified tax agent shall refuse to issue the relevant report under the following circumstances:
(1) the client has hinted to the practising certified tax agent to make an inaccurate report or improper certificate;
(2) the client has intentionally withhold the relevant information and documents; or
(3) the client has made other unreasonable requests that render the report issued by the certified tax agent to be an inaccurate representation of a significant tax-related matter.
Article 25. Practising certified tax agents shall prepare working drafts in accordance with the work procedures determined in the business procedures and issue the relevant report. When issuing a report, a certified tax agent shall not:
(1) opt to remain silent when he/she is aware about that the way the client handles a major tax-related matter contradicts with the provisions of the tax collection laws, rules and relevant regulations of the of such contradiction;
(2) opt to conceal or issue an inaccurate report when he/she is aware that the way the client handles a major tax-related matter will cause damage to the legitimate rights and interests of the report users or other interested parties;
(3) opt to remain silent when he/she is aware that the way the client handles a major tax-related matter will result in the report users or other interested parties being grossly misinformed; or
(4) opt to remain silent when he/she is aware that there are other inaccurate contents in relation to the way the client handles a major tax-related matter.
Article 26. Certified tax agents shall not:
(1) buy or sell the shares or debentures of their clients during the term of practice;
(2) obtain or receive honorarium payments or other properties other than those stipulated in the commission contract or seek other improper gains under the pretext of practice;
(3) allow others to practise in their name;
(4) offer bribes to personnel of tax authorities or instigate or induce their clients to offer bribes; or
(5) commit other acts which are in violation of laws and administrative regulations.
CHAPTER V — TAX FIRMS
Article 27. Tax firms shall be set up with capital contribution by certified tax agents. Tax firms shall be in the form of limited liability tax firms and partnership tax firms, and other forms stipulated by the State Administration of Taxation.
Matters relating to establishment of tax firms shall be dealt with pursuant to prevailing regulations.
Article 28. Tax firms shall file changes of certified tax agents of the firm with the respective management centre of provincial bureau; the management centres of provincial bureaux shall consolidate the changes in certified tax agents of the locality in the current year and submit a report to the management centre of SAT.
Article 29. Tax firms shall pay taxes in accordance with the law and establish a proper international management system for strict financial management, establish an occupational risk fund and take up occupational insurance.
Article 30. Tax firms accepting engagements shall enter into a contract in writing with the clients and collect fees in accordance with the relevant provisions of the State pricing authorities.
Article 31. Tax firms shall file records with the respective management centres of provincial bureaux upon completing merger, change or cancellation formalities etc with the industrial and commercial administration authorities.
Article 32. Tax firms undergoing mergers or changes shall be issued a new practising certificate for tax firm if they satisfy the incorporation criteria; tax firms which do not satisfy the incorporation criteria shall surrender their practising certificate for tax firm and no new certificate shall be issued.
Article 33. The practising certificates of de-registered tax firms shall be cancelled by the management centres of provincial bureaux.
Article 34. Upon completing filing formalities for merger, change or cancellation of a tax firm, a management centre of provincial bureau shall file records with the management centre of SAT within 30 days. The management centres of provincial bureaux shall report status of the relevant filing formalities by tax firms to the tax authorities in charge at the location of the tax firm and make a public announcement. Measures on announcements shall be formulated separately.
Article 35. The management centre of SAT shall implement assessment and administration of qualification ranking of tax firms. The administrative measures shall be formulated separately.
Article 36. The provisions of Article 24 to Article 26 shall apply to tax firms.
CHAPTER VI — ASSOCIATIONS OF CERTIFIED TAX AGENTS
Article 37. Associations of certified tax agents are self-governing industry organisations formed by certified tax agents and tax firms. The Chinese Certified Tax Agents Association (hereinafter referred to as the “CCTAA”) is the national organisation for certified tax agents and tax firms; certified tax agents associations of provinces, autonomous regions, centrally-administered municipalities and municipalities with independent planning (hereinafter referred to as the “provincial tax agents associations”) are local organisations for certified tax agents and tax firms. Certified tax agents associations shall obtain social organisation legal person status in accordance with the law.
Certified tax agents shall join a certified tax agents association.
Article 38. The articles of association of CCTAA shall be formulated or revised by the national members’ congress and filed with the State Administration of Taxation and Ministry of Civil Affairs for records; the articles of association of provincial tax agents associations shall be formulated or revised by the provincial members’ congress and filed with the provincial tax authorities, civil affairs authorities and CCTAA.
Article 39. CCTAA shall formulate and submit the administrative measures on industry governance and practice rules etc for certified tax agents to the State Administration of Taxation for approval before implementation.
Article 40. Certified tax agents associations shall support practising certified tax agents in accordance with the law, safeguard their legitimate rights and interests, give comments and suggestions to the relevant parties and provide services for raising the standard of practice of certified tax agents.
Article 41. Members of a certified tax agents association shall comply with the articles of association of the association, enjoy the rights granted by the articles of association and perform the obligations stipulated in the articles of association.
CHAPTER VII — PENALTY PROVISIONS
Article 42. The following certified tax agents shall be subject to a warning issued by the provincial tax bureau or a fine ranging from RMB1,000 to RMB5,000 and shall make correction within a stipulated period; the certified tax agents shall not exercise their signing authority for external parties during the period of correction; where the certified tax agents fail to make correction within the stipulated period or where the circumstances are serious, a public announcement shall be made. The measures on announcement shall be formulated separately.
(1) certified tax agents who buy or sell the shares or debentures of their clients during the term of practice;
(2) certified tax agents who undertake business or collect fees in their personal capacity;
(3) certified tax agents who disclose the commercial secrets of their clients;
(4) certified tax agents who allow others to practise in their name;
(5) certified tax agents who seek improper gains under the pretext of practice; or
(6) certified tax agents who violated the provisions of these Measures on two or more occasions within an accounting year.
Article 43. The following tax firms shall be subject to a warning issued by the provincial tax bureau or a fine ranging from RMB1,000 to RMB10,000 and be ordered to make correction within a stipulated period; where the tax firms fail to make correction within a stipulated period or where the circumstances are serious, a public announcement shall be made.
(1) tax firms which undertake business in violation of the provisions of these Measures;
(2) tax firms which collect fees despite not performing their obligations in accordance with the agreement;
(3) tax firms which do not keep accounts in accordance with the financial accounting system and the internal management is chaotic;
(4) tax firms which seek improper benefits under the pretext of practice;
(5) tax firms which adopt exaggerating promotion, defame fellow industry player or charge below-cost fees to undertake business; or
(6) tax firms which allow others to undertake the relevant business in their name.
Article 44. Where the issuance of false tax-related documents by a certified tax agent or tax firm has not resulted in non-payment or under-payment of taxes by the client, the provincial tax bureau shall issue a warning, impose a fine ranging from RMB1,000 to RMB30,000 and make a public announcement.
Article 45. Where the violation of laws and administrative regulations by a certified tax agent or tax firm has resulted in non-payment or under-payment of taxes by a client, the provincial tax bureau shall impose a fine in accordance with the provisions of Article 98 of the Implementation Regulations for the Tax Levying and Collection Law; where the circumstances are serious, cancel the filing of practice record or take back the practising certificate and request that the industrial and commercial administration authorities revoke the business licence of the tax firm. Under any of the aforesaid circumstances, the management centres of provincial bureaux shall file the outcome of punishment with the management centre of SAT and make a public announcement. .
CHAPTER VIII — SUPPLEMENTARY PROVISIONS
Article 46. The management centre of SAT shall organise annual inspection of tax firms and certified tax agents on a unified basis and the management centres of provincial bureaux shall implement the annual inspection.
Article 47. The phrases of “above” or “below” a numeral for expression of number, frequency and amount mentioned in these Measures shall include such numeral.
Article 48. Administrative measures on non-nationals of the People’s Republic of China participating in qualifying examination for certified tax agents and engaging in certified tax agent business shall be formulated separately.
Article 49. These Measures shall be effective 1 February 2006.