Laws of the People's Republic of China

International Taxation Department of the State Administration of Taxation on the Examination and Approval of Anti-tax-avoidance Cases

Ji Bian Han [2006] No. 76 June 14, 2006

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 strengthening the management of auditing on cases of transfer pricing as well as arrangements of advance pricing and improving the work efficiency, the State Administration of Taxation determined to elevate the measures and procedures for the examination and approval of anti-tax-avoidance cases, we hereby inform the relevant issues as follows:

1.

As from June 19, 2006, a case involving the auditing on transfer pricing or arrangement of advance pricing which is reported to the State Administration of Taxation for examination and approval shall not be made in written form any more and shall be subject to the administration system of anti-tax-avoidance examination and approval or the management system of advance pricing without any exception.

2.

The management system of anti-tax-avoidance examination and approval and the management system of advance pricing are located on the supportive website of anti-tax-avoidance work on the internal network of tax authorities in the whole country, which is http£º//100.16.139.3. A region can start the former website by inputting the web address into the address line of IE browser on computers that are linked to the internal network of the tax authorities throughout the country. Before performing any report of cases for examination and approval, a region shall read earnestly through the relevant instructions on the management system of anti-tax-avoidance examination and approval, the management system of advance pricing as well as the operating instructions for provincial clients.

3.

In order to confirm a stable transition of the relevant work after the system is put into operation, the transfer of relevant data shall be arranged as follows:

(1)

With regard to the data of a case which has been filed and settled upon examination and approval before June 19, 2006, the State Administration of Taxation shall be responsible for uploading it into the system so that the relevant regions can log in the system for inquiry and operation.

(2)

With regard to any application for filing or settling a case after June 19, 2006, the tax authority of the relevant province, autonomous region, and municipality directly under the Central Government or city specifically designated in the state plan shall appoint special personnel to answer for the log-in.

(3)

With regard to any case that has been filed upon examination and approval of the State Administration of Taxation before June 19, 2006 and has not yet been settled, the relevant region which wants to have it settled shall direct the settlement through the relevant system.

(4)

With regard to a case of the previous year that was filed without being examined by the State Administration of Taxation, if it is required to be settled after June 19, 2006, the relevant materials of case filing shall be completed in the system before any case settlement is made.

4.

In case a region meets any problem in operation, it shall timely feed it back to the State Administration of Taxation for deliberation and settlement.

Contact Person:

Xia Guangyu, Telephone: 010-63417922

Huang Xiaoli, Telephone: 010-63417964

Qian Yalin, Telephone: 0838-2511188-8322