KNOWLEDGE
China's Current Tax System - Tax Legislation
For the time being, the State Organs having authority to formulate tax laws or tax policy mainly include National People's Congress and its Standing Committee, State Council, Ministry of Finance, State Administration of Taxation, Tariff and Classification Committee of the State Council, and General Administration of Customs.
(a) Tax laws are enacted by the National People's Congress (NPC), e.g., the Individual Income Tax Law of the People's Republic of China; or enacted by the Standing Committee of the National People's Congress, e.g., the Tax Collection and Administration Law of the People's Republic of China.
(b) The administrative regulations and rules concerning taxation are formulated by the State Council, e.g., the Detailed Rules for the Implementation of the Tax Collection and Administration Law of the People's Republic of China, the Detailed Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China, the Provisional Regulations of the People's Republic of China on Value Added Tax.
(c) The departmental rules concerning taxation are formulated by the Ministry of Finance, the State Administration of Taxation, the Tariff and Classification Committee of the State Council, and the General Administration of Customs, e.g., the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value Added Tax, the Provisional Measures for Voluntary Reporting of the Individual Income Tax.
The formulation of tax laws shall follow four steps: drafting, examination, voting and promulgation. The four steps for the formulation of tax administrative regulations and rules are: planning, drafting, verification and promulgation. The four steps mentioned above shall take place in accordance with laws, regulations and rules.
Besides, the laws of China stipulates that within the framework of the national tax laws and regulations, some local tax regulations and rules may be formulated by the People's Congress at provincial level and its Standing Committee, the People's Congress of minority nationality autonomous prefectures and the People's Government at provincial level. The following table summarises up the current tax laws, regulations and rules and relevant legislation in China.
|
Laws and Regulations |
Legislative Organization |
Description |
|
Tax Laws |
Tax laws enacted by the NPC and its Standing Committee |
In addition to the constitution, tax laws have the highest legal effect in the tax system. For example, the Enterprise Income Tax Law, the Individual Income Tax Law, the Vehicle and Vessel Tax Law, the Law on the Administration of Tax Collection, and the Decision on the Provisional Regulations on the Use of Value-added Tax, Consumption Tax and Business Rax by Foreign-invested Enterprises and Foreign Enterprises. |
|
Authorized Legislation |
The provisional regulations or regulations enacted by the State Council with the authorization of the NPC and its Standing Committee |
It is quasi-law. It has the nature and status of national laws, and its legal effect is higher than administrative regulations, so it is ready to be promoted to law when conditions are mature. For example, the Provisional Regulations of the People's Republic of China on Value-added Tax. |
|
Tax Regulations |
Tax administrative regulations enacted by the State Council |
In the form of Chinese laws, it is lower than the constitution and laws and higher than local tax regulations, departmental rules and local tax rules, which are generally applicable throughout the country. For example, Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China, Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection, etc. |
|
Local tax laws and regulations enacted by Local People's Congresses and Standing Committees |
Currently, it is limited to Hainan province and ethnic autonomous areas. |
|
|
Tax Rules |
Tax departmental rules formulated by the competent tax authorities of the State Council |
The competent tax department of the State Council refers to the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs. Such rules shall not contravene the constitution, tax laws or administrative regulations. For example, the Implementation Rules of the Provisional Regulations on Value-added Tax. |
|
A local tax rules formulated by a local government |
It shall be carried out under the premise of explicit authorization of tax laws and regulations and shall not contravene tax laws and administrative regulations. Such as Urban Construction Tax, Property Tax and Other Local Tax Implementation Rules. |
|
Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
Language
close
