Laws of the People's Republic of China

The State Administration of Taxation, the State Administration of Foreign Exchange

Notice of SAT and SAFE on Putting into Trial Use the Regime of Declaring Tax Reimbursement for Export without Providing the Paper Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange

Guo Shui Han [2005] No. 1051

Bureaus of State Taxes and Branches of the State Administration of Foreign Exchange in all provinces, autonomous regions, municipalities under direct control of the Central Government, and cities specially designated in the state plan:

The Submission and Examination System via Internet for the Collection Verification and Writing-off of Export Proceeds in Foreign Exchange has recently been launched by the State Administration of Foreign Exchange in order to simply the formalities in collection verification and writing-off of export proceeds in foreign exchange and to facilitate trade. And in order to ameliorate the transition of the regime in collection verification and writing-off of export proceeds in foreign exchange, the State Administration of Taxation and the State Administration of Foreign Exchange decide to select several export enterprises in Guangdong, Liaoning and Beijing to put into trail use the new regime of declaring tax reimbursement for export without providing the special couplet of tax reimbursement for export of the form of collection verification and writing-off of export proceeds in foreign exchange, and of the taxation authorities examining tax reimbursement for export using the electronic data in collection verification and writing-off of export proceeds in foreign exchange. And the relevant issues concerning this are hereby notified as follows:

I.

The Bureaus of State Taxes and Branches of the State Administration of Foreign Exchange in the areas where this policy is put into trial use, shall do well the work hereof in accordance with The Measures of the State Administration of Taxation and the State Administration of Foreign Exchange for Putting into Trial Use in Several Export Enterprises in Guangdong, Liaoning and Beijing the Regime of Declaring Tax Reimbursement for Export without Providing the Paper Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange (please refer to the annex).

II.

The measures for the administration of tax reimbursement for export shall remain unchanged in the areas where this policy is not put into trial use.

III.

The Bureaus of State Taxes and Branches of the State Administration of Foreign Exchange in the areas where this policy is put into trial use, shall, during the work hereof, closely cooperate with each other and timely sum up the experience so as to advance the work hereof, and report the questions encountered during the work. And other areas where the Submission and Examination System via Internet for the Collection Verification and Writing-off of Export Proceeds in Foreign Exchange has already been carried out, may, with reference to the spirit of this notice, actively study the operational issues in local areas. The State Administration of Taxation and the State Administration of Foreign Exchange will study the work of carrying-out nationwide in accordance with the situations of putting into trial use this policy and with the carrying-out in every area.

Annex: The Measures of the State Administration of Taxation and the State Administration of Foreign Exchange for Putting into Trial Use in Several Export Enterprises in Guangdong, Liaoning and Beijing the Regime of Declaring Tax Reimbursement for Export without Providing the Paper Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange

The State Administration of Taxation

the State Administration of Foreign Exchange

November 4, 2005 Annex:The Measures of the State Administration of Taxation and the State Administration of Foreign Exchange for Putting into Trial Use in Several Export Enterprise in Guangdong, Liaoning and Beijing the Regime of Declaring Tax Reimbursement for Export without Providing the Paper Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange

In order to advance the Submission and Examination System via Internet for the Collection Verification and Writing-off of Export Proceeds in Foreign Exchange, and to optimize the administration of tax reimbursement for export, the State Administration of Taxation and the State Administration of Foreign Exchange decide to select 30 export enterprises in Guangdong Province, 20 in Liaoning Province and those in the Economy and Technology Development Zone in the Xicheng District of Beijing (hereafter referred to as the pilot enterprises, and please refer to Annex 4 for the name list of the pilot enterprises in the Provinces of Guangdong and Liaoning) to put into trial use the new regime of declaring tax reimbursement (exemption) for export without providing the special couplet of tax reimbursement for export of the form of collection verification and writing-off of export proceeds in foreign exchange (hereafter referred to as the Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange). And the relevant issues concerned is hereby notified as follows:

I.

Where the pilot enterprises declare enter out of goods as of September 1, 2005 (the export date specified in the Goods Declaration for Exportation (specially used for tax reimbursement for export) shall prevail)), the foreign exchange authorities in charge need not, after the pilot enterprises go through the procedure of collection verification and writing-off of export proceeds in foreign exchange at the foreign exchange authorities in charge, affix the seal of "the collection of export proceeds in foreign exchange has been verified and written off" on the Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange. Where the pilot enterprises apply for tax reimbursement (exemption) for export goods to the taxation authorities in charge, they need not provide the Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange.

II.

The Bureaus of State Taxes and Branches of the State Administration of Foreign Exchange at the provincial level in the areas where this policy is put into trial use, shall, in accordance with the local Transmission Program of Electronic Data of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange (hereafter referred to as the Transmission Program) which has been filed to the State Administration of Taxation and the State Administration of Foreign Exchange for record, organize and carry out the related works of electronic data transmission.

The Transmission Program shall place stress on the safety, secrecy, accuracy and timeliness of the transmission of electronic data, and the data transmission shall be in conformity with the data interface standard of the Examination System for Tax Reimbursement for Export, and a system of account checking-up between the two sides shall be established.

The Bureaus of State Taxes at the provincial level in the areas where this policy is put into trial use shall formulate mechanisms and management measures governing the transmission of electronic data within the local taxation system so as to ensure the safety of the electronic data.

III.

The Branches of the State Administration of Foreign Exchange at the provincial level in the areas where this policy is put into trial use shall, in accordance with the Transmission Program, daily transmit to the Bureaus of State Taxes at the provincial level the electronic data of collection verification and writing-off of export proceeds in foreign exchange of the pilot enterprises (including the verified and written-off electronic data and the overdue unverified and unwritten-off electronic data, etc.), and periodically provide, in accordance with the bilaterally-decided time limit and means of transmission, the Electronic Data Book of the Verified and Written-off Collection of Export Proceeds in Foreign Exchange (specially used for tax reimbursement for export) (please refer to Annex 1), which serves as the evidence for handling tax reimbursement (exemption) for export goods or proving the electronic data.

Whereas the Bureau of State Taxes of Beijing and the Beijing Office of the State Administration of Foreign Exchange have adopted an encryption system of electronic sealing for the electronic data of collection verification and writing-off of export proceeds in foreign exchange in the Transmission Program, they may need not provide in paper form the Electronic Data Book of the Verified and Written-off Collection of Export Proceeds in Foreign Exchange (specially used for tax reimbursement for export).

IV.

In accordance with Article 2 of the Notice of the State Administration of Taxation on Relevant Issues concerning the Administration of Tax Reimbursement (Exemption) for Export Goods (Guo Shui Fa [2004] No. 64), where the pilot enterprises declare tax reimbursement (exemption) for export goods and the settlement of foreign exchange is postdated, the electronic data of collection verification and writing-off of export proceeds in foreign exchange may temporally be exempt from the examination of the taxation authorities; in case that the electronic data of collection of export proceeds in foreign exchange of the pilot enterprises have not yet been verified and written-off in 180 days as of the export declaration date (the export date specified in the Goods Declaration for Exportation (specially used for tax reimbursement for export) shall prevail)), Article 5 of this Notice shall be applied to deal with it; in case that the pilot enterprise is in any one of the 6 circumstances listed in Article 2 of the Document Guo Shui Fa [2004] No. 64, the taxation authorities shall handle tax reimbursement (exemption) only after they conduct checking-ups between the tax reimbursement data declared by the pilot enterprise and the electronic data of the verified and written-off collection of export proceeds in foreign exchange.

The taxation authorities, while examining tax reimbursement for export, shall pay attention to the conformity between the Serial Number of the Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange and the Approval Code of the Goods Declaration for Exportation.

V.

The electronic data of collection of export proceeds in foreign exchange of the pilot enterprises have not been verified and written-off after they declared tax reimbursement (exemption) for export goods.

(1)

Where the pilot enterprises do not receive the electronic data transmitted by the foreign exchange authorities in the time limit of 5 work days prescribed in Document Guo Shui Fa [2004] No. 64 after they provided within paper the Form of Collection Verification and Writing-off of Export Proceeds in Foreign Exchange, the taxation authorities in charge shall issue to the pilot enterprises the Enquiry Notice for No Electronic Data of Verified and Written-off Collection of Export Proceeds in Foreign Exchange (hereafter referred to as the Enquiry Notice, and please refer to Annex 2). The pilot enterprises shall, within 15 work days after receiving the Enquiry Notice, provide the taxation authorities in charge with the Attestation of the Collection of Export Proceeds in Foreign Exchange Having Been Verified and Written-off (hereafter referred to as the Attestation, please refer to Annex 3) issued by their foreign exchange authorities in charge.

(2)

The pilot enterprises may enquire, with the Enquiry Notice and at the foreign exchange authorities in charge, the situations of verification and writing-off of collection of export proceeds in foreign exchange. And as regard to the verified and written-off collection of export proceeds in foreign exchange, the foreign exchange authorities shall, within 5 work days as of the enquiry day, issue to the pilot enterprises the Attestation of Verification and Writing?Coff, and retransmit, on the day after the issuing of the Attestation (postponed in case of the legal festivals), the electronic data of the verified and written-off collection of export proceeds in foreign exchange.

(3)

The taxation authorities in charge of the pilot enterprises shall examine the Attestation provided within the prescribed time limit by the enterprises hereof and their electronic data, and handle for them the business of tax reimbursement (exemption) after acknowledging the electronic data is free of error.

(4)

Where the pilot enterprises fail to provide the Attestation within the prescribed time limit or the Attestation is not free of error, the taxation authorities in charge shall not handle for the enterprises hereof the business of tax reimbursement (exemption) for export goods, and shall recover those handled businesses and regard it as goods for home use to be taxed in accordance with the related provisions.

VI.

The measures of administration of tax reimbursement (exemption) for export goods for the enterprises where the new regime is not put into trail use shall remain unchanged.

VII.

This measure shall go into effect as of November 11, 2005.

Annexes:

1.

The Electronic Data Book of the Verified and Written-off Collection of Export Proceeds in Foreign Exchange (specially used for tax reimbursement for export).(omitted)

2.

The Enquiry Notice for No Electronic Data of Verified and Written-off Collection of Export Proceeds in Foreign Exchange(omitted)

3.

The Attestation of the Collection of Export Proceeds in Foreign Exchange Having Been Verified and Written-off(omitted)

4.

The Name List of the Pilot Enterprises in the Provinces of Liaoning and Guangdong(omitted)