The General Administration of Customs interprets the "Regulations on the Taxation Management of Import and Export Goods of the People's Republic of China"

The General Administration of Customs announced onOctober 28, 2024, the "Administrative Measures for Tax Collection on Import and Export Goods of the People's Republic of China" (General Administration of Customs Order No. 272, hereinafter referred to as the "Measures"), which will take effect on December 1, 2024. In order to enable administrative counterparts and all sectors of society to fully understand and accurately grasp the background and key content of this regulatory revision, the following interpretations are provided regarding relevant issues:

1. Background and Purpose of the Revision

The "Administrative Measures for Tax Collection on Import and Export Goods of the People's Republic of China" (General Administration of Customs Order No.124) (hereinafter referred to as the "Tax Collection Measures") has played an important role in ensuring that customs conducts tax collection in accordance with the law and scientifically, ensuring that taxes due are fully collected, and protecting the legitimate rights and interests of taxpayers since its release in 2005. Since the nationwide customs clearance integration reform, some provisions in the current "Tax Collection Measures" are no longer compatible with the actual tax collection work. After the introduction of the "Customs Law of the People's Republic of China" (hereinafter referred to as the "Customs Law"), inconsistencies between relevant concepts and institutional arrangements in the current "Tax Collection Measures" and those stipulated in the "Customs Law" have become prominent. Some provisions are difficult to implement, and standards need to be refined, requiring further amendments based on the "Customs Law" to be implemented alongside it on December 1.

2. Main Issues to Note

(1) Fully Solidifying Reform Achievements.

After customs fully implements nationwide customs clearance integration, taxpayers can declare and pay taxes independently based on actual needs. The "Customs Law" solidifies this reform achievement through legal means; therefore, the "Measures" clarify relevant declaration and tax payment requirements with taxpayers as the main body (Articles 7 and 9). It is clearly stipulated that taxpayers should truthfully and normatively declare tax-related elements while calculating and declaring their taxable amounts independently (Article 8). The "Customs Law" elevates the achievements of consolidated tax collection reform to legal provisions, adding detailed regulations regarding consolidated tax payment deadlines (Article 20).

(2) Adding Provisions Related to Tax Amount Confirmation.

Implementing Article 45 of the "Customs Law" regarding"tax amount confirmation," clarifying the tax amount confirmation process and related requirements (Articles 52, 54, and 55).

(3) Implementing Tax Risk Classification Disposal.

Clarifying basic principles for customs to carry out tax risk prevention and control, conducting spot checks on tax collection elements such as taxable prices, product classification, origin, etc., and carrying out classified disposal (Article 53). At the same time, adding provisions related to local taxpayer management further reflects that customs tax collection management is coupled with taxpayer services, striving to build a harmonious co-governance relationship between customs and enterprises (Article 80).

(4) Adding Provisions Related to Tax Enforcement.

According to relevant requirements of the "Customs Law" and the "Administrative Coercion Law of the People's Republic of China" (hereinafter referred to as the "Administrative Coercion Law"), a special chapter is set up to clarify provisions related to tax enforcement (Chapter Seven). Considering that specific processes for enforcement measures are already detailed in the "Administrative Coercion Law," it is clarified that execution shall be carried out according to provisions of the "Administrative Coercion Law" (Article 76), without repeating regulations, while simultaneously abolishing the "Interim Measures for Tax Preservation and Enforcement by Customs of the People's Republic of China" (General Administration of Customs Order No.184).

(5) Adjusting Applicable Dates for Tax Rates and Exchange Rates.

The "Customs Law" changes the applicable date for tax rates and exchange rates from"the date of acceptance of declaration" to "the date of completion of declaration." The relevant provisions regarding applicable dates for tax rates and exchange rates in the "Measures" are modified according to the "Customs Law," clarifying applicable dates for advance declarations and two-step declarations (Article 14). At the same time, it adjusts principles for exchange rate application, no longer distinguishing between benchmark currency exchange rates and non-benchmark currency exchange rates; it uniformly adopts the middle rate published by the People's Bank of China authorized by China Foreign Exchange Trade System (Article 13).

(6) Deleting Provisions Related to Tax Exemptions for Import and Export Goods.

The current Chapter Five of the "Tax Collection Measures" regarding"Tax Reductions and Exemptions for Import and Export Goods" has been absorbed by the "Administrative Measures for Tax Reductions and Exemptions on Import and Export Goods of the People's Republic of China" (General Administration of Customs Order No. 245). The "Measures" delete these contents while retaining only a principled statement that tax-exempt goods should handle customs procedures according to regulations, as well as provisions regarding applicable tax rates when tax-exempt goods are approved for transfer, repurposing or other disposal (Article 15), ensuring good institutional connection with the "Administrative Measures for Tax Reductions and Exemptions on Import and Export Goods of the People's Republic of China" (Article 78).

----Quoted from Customs Assistant