Measures for the Administration of Tax Auditing Case Sources (Trial)
Chapter I General Provisions
Article 1 For the purposes of standardizing the administration of sources of tax auditing cases, improving the quality and efficiency of tax auditing, and promoting the reform of the tax auditing system, these Measures are developed in accordance with the Law of the People's Republic of China on the Administration of Tax Collection, the detailed rules for its implementation and other applicable regulations.
Article 2 These Measures shall apply to the handling of tax auditing cases by the State Taxation Administration (STA), national tax administrations and local tax administrations at provincial, municipal and county levels (hereinafter collectively referred to as “tax administrations”).
Article 3 For the purposes of these Measures, the sources of tax auditing cases (hereinafter collectively referred to as “sources”), i.e., the sources of tax-related law violation cases, refer to the data, information and clues related to suspected tax evasion (evasion of tax payment), evasion of tax arrears recovery, tax fraud, refusal to pay taxes, false invoicing and other tax-related illegal act formed in such procedures as collection, analysis, judgment and processing.
Article 4 For the purposes of these Measures, the administration of sources of tax auditing cases refers to the administration process of collecting, processing, filing and giving feedback on various types of tax-related data, information and clues by the auditing bureaus of tax administrations (hereinafter referred to as “auditing bureaus”) according to relevant procedures.
The processes of administrating sources mainly comprise source information collection, source classification and handling, the filing and allocation of sources and the use of handling results.
Article 5 Source administration shall follow the principles of legal compliance, risk orientation, overall coordination, classification and rating, and dynamic management.
Article 6 Tax administrations shall be oriented to risk management, base their work on tax big data, focus on risk push, referral from external agencies, and self-selected audits, and crack down on tax-related violations of law such as tax evasion (evasion of tax payment), evasion of tax arrears recovery, tax fraud, refusal to pay taxes, and false invoicing. They shall emphasize the analysis of, feedback on and value-added use of processing results and form a new pattern of risk-based closed-loop source management.
Article 7 Sources are subject to centralized management by auditing bureaus.
Auditing bureaus at a higher level shall direct and oversee the source management of subordinate auditing bureaus.
Where the sources determined by subordinate auditing bureaus are included in the list of key auditing objects of superior auditing bureaus, such sources shall be reported to superior auditing bureaus for approval.
The region responsible for centralized management of sources shall determine the sources selected by subordinate auditing bureaus with the approval of superior auditing bureaus.
Article 8 To ensure the promptness, validity, and accuracy of source information, tax authorities shall continue their efforts to make source administration more information-based, efficiently acquire tax collection and management data and social public data, and effectively integrate them.
Article 9 National tax administrations and local tax administrations shall strengthen the communication and collaboration of source administration, establish and improve their cooperation mechanism of source administration, and realize the common establishment, sharing and connectivity of tax-related data, information and clues.
Chapter II Source Information
Article 10 Source information refers to tax-related data, information and clues to tax-related illegal acts of taxpayers, withholding agents and other tax-related parties (hereinafter referred to as “taxpayers”) formed by tax administrations in tax management and provided by relevant external units, departments or individuals.
Article 11 Source information contains the following contents:
(1) tax-related data and information declared by taxpayers themselves and by tax administrations in the process of tax management, such as those of tax registration, invoice use, tax preferences, qualification recognition, export tax refunds, and financial statements of enterprises;
(2) risk information of high-risk taxpayers identified and pushed by the risk management department and other departments of tax administrations in risk analysis and identification;
(3) clues to tax-related violation of law provided by CPC committees, governments, discipline inspection and supervision authorities and tax authorities at higher levels (hereinafter collectively referred to as “superior authorities”) through tasks supervised or assigned in the forms of supervision letter, assignment letter or other letters;
(4) clues to tax-related violation of law provided by informers;
(5) clues to tax-related violation of law formed in investigative assistance entrusted;
(6) clues to tax-related violation of law provided by such external authorities as public security bureau, procuratorate, auditing bureau, and discipline inspection and supervision organs, as well as supervision, internal auditing, discipline inspection and supervision departments of tax administrations;
(7) international tax-related intelligence formed in the course of special intelligence exchange, automatic intelligence exchange and spontaneous intelligence exchange;
(8) tax auditing data such as case clues, handling and penalties formed in the course of law enforcement by auditing bureaus;
(9) tax-related information shared by government bodies and social organizations as well as third-party information such as social public data collected by tax administrations;
(10) other tax-related data, information and clues to tax-related violations of law.
Article 12 Auditing bureaus shall expand the channels of information sources, and collect and organize source information as required.
(1) The department of sources of auditing bureaus (hereinafter referred to as “the department of sources”) is in charge of the following:
1. receiving risk information of high-risk taxpayers pushed by the risk management department and other departments, as well as clues to tax law violations provided by relevant units and departments within and outside tax administrations, and confirming the tasks and time limit of the departments whence source information comes;
2. receiving clues supervised or assigned, and clarifying the tasks and time limit for matters supervised or assigned;
3. collecting and collating tax-related data and information such as information taxpayers have declared, tax administration data, tax auditing data, international tax intelligence and third-party information, and extracting source information required for case selection according to auditing tasks and plans.
(2) The department of tip-offs of auditing bureaus (hereinafter referred to as “the department of tip-offs”) shall receive tip-off clues in the form of letter, visit, the Internet, fax and many others. 12366 tax service hotline tip-off post is set for receiving whistle-blowing clues through telephone, and relevant personnel shall complete a worksheet and submit it to the department of tip-offs for further handling.
(3) The department of investigative assistance of auditing bureaus (hereinafter referred to as “the department of investigative assistance”) shall receive investigative assistance clues in the form of letters sent by the investigative assistance information management system, paper letters sent without the investigative assistance system, field investigative assistance, among others, and register source information according to the Letter of Investigative Assistance regarding Tax Law Violation Cases.
Article 13 Source information is identified by taxpayer identification number and archived in the principle of one file for one taxpayer account. A source information file includes, among others, basic information, classification information, abnormal information, shared information and necessary information identification.
Article 14 Auditing bureaus shall classify source information and establish a source information database. They shall, under the requirements of random inspection, identify key auditing objects in source information files by rating, and such key auditing objects shall serve as important sources of information for establishing a directory of random inspection objects for tax auditing.
Chapter III Types of Sources
Article 15 Sources are divided into 9 categories by varying origins of source information:
(1) pushed sources are those selected based on the analysis of high-risk taxpayers’ risk information pushed by the risk management department and other departments under the risk management workflow;
(2) supervised sources are those confirmed by clues to specific taxpayers’ tax-related violations of law or tasks issued by superior authorities in supervision letters or other forms with clear work and time limit requirements;
(3) assigned sources are those confirmed by clues to specific taxpayers’ tax-related violations of law or tasks issued by superior authorities in assignment letters or other forms;
(4) arranged sources are those selected from source information analyzed according to the random inspection plans and auditing tasks of combating tax evasion (evasion of tax payment), evasion of tax arrears recovery, tax fraud, refusal to pay taxes, false invoicing, and many others arranged by tax administrations at a high level;
(5) self-selected sources are those selected from source information analyzed according to the random inspection plans and auditing tasks of combating tax evasion (evasion of tax payment), evasion of tax arrears recovery, tax fraud, refusal to pay taxes, false invoicing, and many others established by tax administrations at the same level;
(6) tip-off sources are those confirmed by identifying and judging the tip-off clues;
(7) co-investigated sources are those confirmed by identifying and judging the clues formed in investigative assistance;
(8) referred sources are those confirmed by identifying and judging the clues to tax-related violation of law provided by such external authorities as the public security bureau, procuratorate, auditing bureau, and discipline inspection and supervision organs, as well as supervision, internal auditing, discipline inspection and supervision departments of tax administrations;
(9) other sources are those confirmed by identifying and judging other clues to tax-related violations of law collected by tax auditing departments or provided by relevant units and departments within and outside tax administrations.
Article 16 Sources supervised, assigned, referred, tipped off or co-investigated are collectively referred to as special sources due to their special source channels.
Auditing bureaus shall assign specific persons to the management of special sources. Such persons shall strictly abide by the discipline of confidentiality and manage sources under law.
Chapter IV Handling of Sources
Article 17 Handling of sources refers to the process that the department of sources identifies and judges source information collected, and, based on the type of sources, taxpayer status, clarity of clues, tax risk level and other factors, returns or supplements source information, or transfers it to relevant departments of tax administrations, or temporarily stores it for investigation, or verifies it through investigation (including investigative assistance), files sources for inspection, or performs classification or other matters.
Article 18 The department of sources shall identify and judge source information, give advice on handling, complete the Form for Approval of Sources of Tax Auditing Cases (see Annex 1), and handle the sources with approval of responsible persons of auditing bureaus.
Article 19 Where source information pushed and referred falls under any of the following circumstances, the department of sources shall return source information to the departments whence such information comes or require such departments to provide additional information by sending them a Letter of Source Information Return (Supplement) (see Annex 2):
(1) if source information involves taxpayers not subject to the jurisdiction with their status being abnormal or canceled, such information can be returned;
(2) if source information has data errors, does not provide necessary data and information or cannot be further handled in other circumstances, it can be returned or supplemented;
(3) if source information involves unclear clues to tax law violations or incomplete data, or cannot be supplemented as required, it can be returned;
(4) any other circumstances where source information should be returned or supplemented as required.
Article 20 Where source information falls under any of the following circumstances, the department of sources shall transfer such source information to relevant departments of a tax administration for handling by sending them a Letter of Referral:
(1) if tip-off, referred and other source information involves invoice-related illegal activities or other matters which can be modified through daily tax management, such information shall be transferred to relevant departments for handling with the approval of the responsible person of the tax administration;
(2) where investigative assistance matters require proof of taxpayers' status such as no such account, being abnormal and canceled, tax data withdrawal, invoice verification, and many others, such matters shall be transferred to relevant departments to facilitate evidence collection upon approval of responsible persons of auditing bureaus;
(3) source information involving special tax adjustments shall be transferred to the anti-tax avoidance department for handling with the approval of the responsible person of the tax administration;
(4) any other matters that need to be transferred to relevant departments to facilitate their work.
Article 21 Source information falling under any of the following circumstances shall be temporarily stored for investigation:
(1) supervised and assigned source information involving taxpayers with abnormal or canceled status may be temporarily stored for investigation with the approval of the department that supervises or assigns such sources;
(2) tip-off source information involving taxpayers with abnormal or canceled status or unclear clues to tax law violations may be temporarily stored for investigation;
(3) source information involving taxpayers who have fled and cannot be investigated may be temporarily stored for investigation;
(4) any other circumstances where it is not appropriate to inspect or return source information.
Article 22 Special sources falling under any of the following circumstances shall be verified through investigation (including investigative assistance) with the approval of responsible persons of auditing bureaus:
(1) the tasks supervised or assigned only involve assistance in obtaining evidence and other matters, and such matters can be completed through investigation (including investigative assistance) for verification with the approval of the department that supervises or assigns such sources;
(2) tip-off source information has relatively clear clues but lacks necessary documentation, and the department of tip-offs thinks that such source information should be verified through investigation (including investigative assistance);
(3) co-investigated source information failing to meet the conditions for direct filing of cases under the Measures for Administration of Invoice Investigation Assistance regarding Tax Law Violation Cases (for Trial Implementation) shall be timely verified through investigation (including investigative assistance) as per the requirements of investigative assistance;
(4) any other special source information that has some doubtful clues but lacks necessary documentation, necessitating verification through further investigation (including investigative assistance);
for source information requiring verification through investigation (including investigative assistance), the department of sources or tip-offs or investigative assistance shall transfer such information to the department of inspection of auditing bureaus (hereinafter referred to as “the department of inspection”) by issuing a Notification of Tasks of Tax Auditing Verification Through Investigation (Including Investigative Assistance) (see Annex 3); the department of inspection shall carry out an investigation (including investigative assistance) for verification by issuing a Notification of Tax Investigation (Jian Tong II). The department of inspection shall, under relevant requirements, prepare a Report of Tax Auditing Verification Through Investigation (Including Investigative Assistance) (see Annex 4) based on the results of the investigation and verification, send them to the department arranging such investigation and verification (including investigative assistance) tasks.
Article 23 Sources shall be archived for inspection if they:
(1) are clearly required to be filed for inspection by matters supervised or assigned;
(2) contain risk information of high-risk taxpayers received and confirmed by the department of sources, or are arranged and self-selected under auditing tasks and plans;
(3) show that the informed contents accepted by the department of tip-offs are detailed and have clear clues;
(4) are co-investigated with information received by the department of investigative assistance involving taxpayers with normal status, or fall under any of the following circumstances: (i) the entruster has issued a Notice of Confirmed False Invoices and provided relevant evidence; (ii) the evidence provided by the entruster can prove that the inspectee involved in investigative assistance is suspected of tax law violations; the investigative assistance confirms that the inspectee has tax law violations;
(5) are referred to involving taxpayers with normal status and clear clues to tax law violations;
(6) involve taxpayers with tax law violations verified through investigation (including investigative assistance);
(7) should be filed after identification and judgment in other circumstances;
(8) are required to be archived for inspection by superior auditing bureaus.
Chapter V Allocation of Sources
Article 24 Auditing bureaus shall develop a group deliberation system for source administration, focus on reviewing and approving key auditing objects and batch filing/cancellation of sources, and formulate standards for sources subject to group deliberation.
For the purposes of the review and approval of key auditing objects and batch filing/cancellation of sources up to group deliberation standards, responsible persons of auditing bureaus shall convene a group deliberation meeting for source administration, and heads of relevant departments of auditing bureaus shall attend such a meeting.
Article 25 For cases that need to be filed for inspection, the department of sources shall prepare the Form for Approval of Tax Auditing Case Filing and decide to archive a case with the approval of responsible persons of auditing bureaus or after consideration by the group deliberation meeting for source administration.
If the number of cases filed in the same batch is large, an Inventory of Tax Auditing Sources can be attached (see Annex 5).
Article 26 The priority principle of filing of cases depends on their sources:
(1) supervised sources take priority over other sources;
(2) important or urgent sources take priority over general sources;
(3) real-name tip-off sources take priority over anonymous ones.
Article 27 Sources involving the joint jurisdiction of the national and local tax administrations shall be jointly archived if falling under any of the following circumstances:
(1) joint audits are required by competent authorities for the sources;
(2) key auditing objects are subject to joint jurisdiction;
(3) sources are selected by joint random inspection;
(4) the national and local tax administrations have joint access to specific clues to tax law violations;
(6) sources should be jointly archived in other circumstances with the consensus of the national and local tax administrations.
Article 28 The department of sources shall reasonably allocate the sources to be registered to the department of inspection for inspection.
(1) Matching the auditing level with administration objects. For sources included in the key auditing object list at national, provincial and municipal levels, auditing bureaus of the STA and tax administrations at provincial and municipal levels shall organize or implement inspections respectively under the principle of level-to-level administration.
(2) Matching the subject of law enforcement with the nature of the case. Auditing bureaus of the STA and tax administrations at provincial, municipal and county levels shall organize or implement inspections according to the amount involved in tax law violations, the seriousness of the case, the complexity of the case, the number of areas involved, the social impact and other factors, respectively.
Where auditing bureaus at the same level find it difficult to investigate sources, they can apply to superior auditing bureaus for supervision. Supervised sources issued by superior auditing bureaus, if they fail to obtain approval, shall not be transferred to lower auditing bureaus for investigation by auditing bureaus at the same level.
(3) Matching the auditing force with inspection tasks. Sources of complicated cases may be investigated in the form of “project-based management and teamwork”.
(4) Matching case handling capacity with the features of sources. Assign inspectors reasonably or choose inspectors via competitive bidding according to the industry to which the sources belong, the type of tax law violations and other features.
Article 29 After the sources allocation plan is approved, the department of sources shall develop a Notice of Tax Auditing Tasks, attaching the Project Description of Tax Auditing, stating the period, uncertainties, time limit, requirements and many others of inspection, and hand it over to the department of inspection together with relevant information.
Article 30 The department requesting the revocation of sources shall complete a Form for Approval of Tax Auditing Source Revocation (see Annex 6) and revoke the sources with the approval of responsible persons of auditing bureaus or the decision of the group deliberation meeting on source administration, provided that any of the following circumstances occurs:
(1) sources are incorrectly registered or are repeated;
(2) multiple departments establish an account for the sources at the same time, and the responsible person of the competent tax administration decides to stop the inspection conducted by auditing bureaus;
(3) sources are not in line with the policies of competent authorities or the competent authorities require the revocation of the sources.
Chapter VI Use of Results
Article 31 Auditing bureaus shall track, give feedback on and statistically analyze the results of sources processed as per risk management requirements, in order to attain the closed-loop administration of sources.
Article 32 Relevant departments of auditing bureaus shall promptly complete the Feedback Form of Source Processing Results (see Annex 7) according to the sources processing results which shall be subject to centralized management by the department of sources.
(1) If a case fails to be filed, the department of sources shall record the reason for such failure;
(2) if an inspection is suspended or terminated, the department of inspection shall give feedback and provide details of inspection by stages and reasons for such suspension and termination;
(3) if the execution is suspended or terminated, the executive department shall give feedback, the reasons for such suspension or termination, the Letter of Decision on Tax Handling, the Letter of Decision on Tax Administrative Punishment and relevant information;
(4) if the execution is completed, the executive department shall give feedback, and attach the Letter of Decision on Tax Handling, the Letter of Decision on Tax Administrative Punishment, Tax Payment Certificate and related information.
Article 33 The department of sources shall handle the source processing results in a timely manner upon receiving them, and fill out the Feedback Form of Source Processing Results.
(1) For pushed sources, the department of sources shall report to the risk management department and other departments relevant processing results under the risk management workflow, as well as the common tax-related risk characteristics of taxpayers of industrial, regional or other specific types as reflected in the high-risk response tasks;
(2) for sources supervised, assigned or referred, the department of sources shall report the details of investigations into tax law violations that need to be verified as per the requirements of the departments whence such sources come;
(3) for sources self-selected or arranged, the department of sources shall summarize inspection details and furnish responsible persons of auditing bureaus with periodic reports;
(4) for tip-off and co-investigated sources, the department of sources shall report inspection results to the department of tip-offs or investigative assistance, who shall then report such results to the real-name whistleblower or the party entrusting such investigative assistance.
Article 34 The Feedback Form of Source Processing Results shall be approved by:
(1) the responsible person of the department of sources, tip-offs and investigative assistance, respectively, in case of feedback to relevant departments of auditing bureaus, the real-name whistleblowers and the party entrusting investigative assistance;
(2) responsible persons of auditing bureaus in case of feedback to other departments of the tax administration;
(3) the responsible person of the tax administration in case of feedback to the external units of the tax administration.
Article 35 For the pushed sources not filed by the auditing bureau for inspection, if the department of push still considers it necessary to file a case for inspection after feedback of such sources, then auditing bureaus shall file a case for inspection according to the procedures of assigned sources with the approval of the responsible person of the tax administration.
Article 36 For sources that certainly cannot be handled and reported for feedback on schedule due to case complexity, such circumstances shall be explained to the department whence such sources come.
Article 37 The department of sources shall, on a regular basis, statistically analyze the distribution area, industry, enterprise size, economic nature, type of tax law violations, and the amount of overdue tax paid involved in the sources filed for inspection from perspectives of source information collection, source classification and handling, filing and allocation of sources, and the use of source processing results according to annual work tasks and plans.
Article 38 Auditing bureaus shall identify tax management weaknesses through analysis of audit result statistics and typical cases, and give opinions and advice on improving tax policies and strengthening management, among others.
Chapter VII Supplemental Provisions
Article 39 Where confidentiality provisions apply to sources management, such sources management shall be governed by the Law of the People's Republic of China on Guarding State Secrets, the Law of the People's Republic of China on the Administration of Tax Collection, the Detailed Rules for Implementation of the Law of the People's Republic of China on the Administration of Tax Collection, Rules on Confidentiality Work for the National Tax Authority System, Measures for the Snitch of Tax Law Violations, Measures for the Administration of Tax Audit Case Investigation Assistance (for Trial Implementation) and other relevant provisions.
Article 40 For the purposes of these Measures, “responsible person of the tax administration” refers to the director of a tax administration or the leader of a tax administration authorized by the director of the tax administration.
For the purposes of these Measures, “responsible persons of auditing bureaus” refer to directors of auditing bureaus or leaders of auditing bureaus authorized by directors of auditing bureaus.
Article 41 National tax administrations and local tax administrations of provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning may formulate specific implementation provisions under these Measures.
Article 42 The STA shall be responsible for the interpretation of these Measures.
Article 43 These Measures shall come into force on July 1, 2016.
