Laws of the People's Republic of China

Circular of the State Administration of Taxation on Acceptance of the Voluntary File of Tax Returns by the Taxpayers with an Annual Income of 120,000 Yuan or More

Guo Shui Fa [2006] No. 164

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan:

For the purpose of implementing the Law on Individual Income Tax and the Regulation for the Implementation of the Law on Individual Income Tax as well as the Measures for the Voluntary File of Individual Income Tax Returns (for Trial Implementation, and hereinafter referred to as this Measures), we hereby notify the relevant issues on the acceptance of the voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more as follows:

1.

Achieving unity in thinking, advancing understanding, and fully realizing the significance of voluntary file of tax returns.

The voluntary file of tax returns by taxpayers is a way of collecting individual income taxes in China, as well as a universal practice of all other countries in the world. To enlarge the scope of voluntary file of individual tax returns is an important content for the revision of the Law on Individual Income Tax in 2005. The Law on Individual Income Tax as revised adds the content that the taxpayers "with an annual income of 120,000 yuan or more" and those "under other circumstances as prescribed by the State Council" shall file tax returns voluntarily to the tax authority. The enlargement of the scope of voluntary file of individual tax returns is instrumental in developing the faithful taxation sense of taxpayers, clarifying the legal liabilities of taxpayers, and enhancing the compliance of tax law; it is beneficial to the tax authority to strengthen the administration of tax sources and enhance the adjustment of high-income groups; it facilitates strengthening analysis and comparison, and further boosting the scientific and refined administration of individual income tax; and it is also advantageous for creating conditions and accumulating experiences for further transition to the tax system combined integration with classification.

To enlarge the scope of voluntary file of individual tax returns is a completely new job, and involves the immediate interests of the vast taxpayers. New requirements are brought forward to the tax authority in terms of personnel, management, technology, and equipment, and etc. Therefore, the tax authorities at all levels shall, in view of constructing a harmonious socialist society, implementing the scientific concept of development, perfecting tax payment services, improving the taxation sense of citizens and strengthening the tax collection, fully understand the importance of the administration of voluntary file of individual income tax returns by taxpayers, achieve unity in thinking, enhance understanding and attach great importance.

2.

Strengthening leadership, perfecting measures, and actively and steadily boosting the voluntary file of tax returns.

The voluntary file of individual income tax returns is of high policy-related, high demanding, complexity in operation and large workload. Particularly, the enlargement of the scope of voluntary file of tax returns and the addition of the provisions on annual voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more have set new and higher requirements for the voluntary file of tax returns. The annual voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more is a kind of integrated tax returns on the basis of current itemized tax system, and is different from the former kind of voluntary file of tax returns in the aspects of nature, contents and forms, and these two kinds of voluntary file of tax returns have their respective emphasis but also overlap with each other. Thereby, the relationship of the said two kinds of voluntary file of tax returns shall be dealt correctly and different pertinent measures shall be separately adopted for the said two kinds of voluntary file of tax returns. Presently, the emphasis shall be put on the annual voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more, and on the earnest implementation of leadership in this work. As to the voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more from 2007, it is necessary to carefully analyze all links of work required for tax returns, forecast possible problems and difficulties, bring forward preliminary schemes and measures for dealing with problems and difficulties, conduct careful organization and arrangement, and actively and stably promote the job.

3.

Enhancing propaganda, strengthening tutorship, and laying a good foundation for voluntary file of tax returns

The tax authorities at all levels shall emphasize the publicity on the relevant issues about voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more in various forms and by various means. Primarily, they shall promptly organize the relevant personnel for tax administration, collection administration and information, and etc., to study the Measures and understand the ideas prescribed in the Measures; And then, they shall, by means of trainings, symposia, arrangement of talks, printing of explaining materials, and etc., strengthen the training and tutorship to taxpayers, so as to let taxpayers grasp such matters as the contents, places, time and procedures, and etc. for voluntary file of tax returns, particularly, to make the taxpayers liable for voluntary file of tax returns of their own statutory obligations, the methods and procedures for performing obligations, their rights as well as the legal liabilities for failing to perform such obligations.

4.

Organizing carefully, optimizing service, and ensuring smooth operation of the voluntary file of tax returns

The tax authorities at all levels, especially the grass-roots tax authorities for directly contacting with taxpayers, shall further enhance the service awareness, provide various kinds of services for the voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more, and try to facilitate the taxpayers in terms of publicizing and explaining policies, accepting tax returns efficiently, and handling formalities for making up the underpaid taxes and giving tax rebates in a timely manner. The year of 2007 is the first year for accepting the voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more, and the tax authorities of all regions shall carefully do various jobs as follows.

(1)

Before December 10, 2006, the Individual Income Tax Return (For the taxpayers with an annual income of 120,000 yuan or more) shall be extend to a convenient site that taxpayers can easily get and use, for instance, uploaded onto the website of the tax authority, placed on the tax service hall, sent to the entities with many high-income individuals;

(2)

Within the term for filing tax returns in the first quarter of 2007, the tax authorities for acceptance of file of tax returns shall make full and good preparations for the acceptance of tax return. The tax service hall for acceptance of file of tax returns shall establish a special window for the acceptance of voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more, or provide service for easy and efficient acceptance of tax returns to facilitate the submission of the tax returns by taxpayers. A region that expects a large number of individuals that need to make declarations shall reduce the number of individuals that make direct declarations at the tax service hall by all means, such as promoting the network-based file of tax returns and filing tax returns by mail, and etc.

(3)

The tax service hall for the acceptance of tax returns filed by the taxpayers with an annual income of 120,000 yuan or more shall set up a special window for accepting the file of tax returns for making up the underpaid taxes so as to provide fast and convenient service for it.

(4)

The tax authority with computerized means shall, in accordance with the ideas prescribed by the Measures, pay attention to business demands, adjust and perfect the tax collection management software for acceptance of the file of tax returns, and make full use of computerized means to ensure the smooth file of tax returns by the taxpayers with an annual income of 120,000 yuan or more.

(5)

After the term for the file of tax returns is over, the tax authorities of all regions shall establish archives for the materials on voluntary file of tax returns by the taxpayers with an annual income of 120,000 yuan or more, which shall be sorted out, compared, and analyzed, and shall be taken a dynamic administration thereof.

All regions shall, upon receipt of this Circular, promptly carry out the ideas prescribed in this Circular, take measures to earnestly implement it; and shall find and solve the problems encountered in the implementation thereof in a timely manner, and report the relevant matters to the State Administration of Taxation.

The State Administration of Taxation

November 6, 2006