• 1. Why are the Self-Declaration Rules Concerning Individual Income Tax (Provisional) formulated?
  
• 2. In how many ways is individual income tax collected?
  
• 3. What is self-declaration of tax?
  
• 4. Who need to declare taxes by themselves?
  
• 5. If an individual with annual income of over RMB120,000 has paid taxes in full when receiving income, does he/she need to declare taxes at the end of year?
  
• 6. Why does an individual with annual income of over RMB120,000 need to declare taxes at the end of the year even though he/she has paid taxes in full?
  
• 7. How to understand the expression "annual income of over RMB120,000"? What types of income are included?
  
• 8. What incomes may be excluded from annual income?
  
• 9. How to calculate annual income of each income item?
  
• 10. What materials does the individual with annual income of over RMB120,000 need to submit when declaring taxes?
  
• 11. Where can declaration forms be obtained?
  
• 12. What information shall the individual with annual income of over RMB120,000 provide when declaring taxes?
  
• 13. When shall the individual with annual income of over RMB120,000 declare taxes?
  
• 14. Where shall the taxpayer with annual income of over RMB120,000 declare taxes?
  
• 15. Do the individual with annual income of over RMB120,000 have to declare taxes in the tax handling hall?
  
• 16. May the individual with annual income of over RMB120,000 entrust other persons with declaration?
  
• 17. Will the tax authorities hold taxpayers' information in confidence after handling tax declaration?
  
• 18. Shall the individual with annual income of over RMB120,000 bear legal responsibility if he/she fails to declare taxes within the tax declaration period?
  
• 19. Shall a taxpayer bear legal responsibility if he/she does not declare taxes truthfully in order to pay no tax or underpay the tax?
  
• 20. What legal responsibility shall a withholding agent bear if the taxpayer receives taxable income from the withholding agent and the withholding agent fails to withhold or collect the tax that should be withheld or collected?
  
• 21. Are there punitive measures for some tax officials who, abusing their power, deliberately create difficulties for taxpayers?
  
• 22. What legal responsibility shall a tax agent entrusted by a taxpayer with tax declaration bear if the taxpayer underpays taxes due to reasons on the side of the tax agent?
  
• 23. How can a taxpayer receiving salaries from two or more employers declare taxes?
  
• 24. How can a taxpayer receiving income outside China declare taxes?
  
• 25. Is there any change in the tax declaration methods for individually-owned businesses, sole proprietorship and partnership investors and the contractors and leaseholders of enterprises or social service providers partly or wholly funded by state assets after the promulgation of the Rules?
  
• 26. Where do individually-owned businesses, sole proprietorship and partnership investors and the contractors and leaseholders of enterprises or social service providers partly or wholly funded by state assets handle day-to-day tax declaration during a tax year?
  
• 27. Where do taxpayers declare taxes when receiving various other incomes?
  
• 28. Can the taxpayer change the tax declaration place?
  
• 29. Can the taxpayer defer tax declaration?
  
• 30. What services do the tax authorities provide to taxpayers when they declare taxes?
  
• 31. Because it is the first time that taxpayers in China with annual income of over RMB120,000 are required to declare taxes by themselves, what measures will the tax authorities take in order to ensure the work will be carried out smoothly in the declaration period in 2007?

 

1. Why are the Self-Declaration Rules Concerning Individual Income Tax (Provisional) formulated?

A: The Decision on Amending the Law of the People's Republic of China on Individual Income Tax reviewed and adopted at the 18 th Session of the Standing Committee of the 10 th National People's Congress on October 27, 2005 has widened the scope of tax self-declaration by taxpayers, stipulating that the taxpayer "with individual income exceeding the amount stipulated by the State Council" or in "other cases as specified by the State Council" shall declare taxes by himself/herself. Thereafter, the State Council made a decision on revising the Implementing Rules of the Law on Individual Income Tax, defining "individual income exceeding the amount stipulated by the State Council" as "annual income of over RMB120,000", and authorized the State Administration of Taxation to formulate specific management measures. According to the provisions above, other relevant tax regulations and some effective provisions in the Provisional Measures on Self-Declaration of Individual Income Tax formulated by the State Administration of Taxation in 1995, the State Administration of Taxation formulated the Self-Declaration Rules Concerning Individual Income Tax (Provisional) (hereinafter referred to as "Rules") after an in-depth study and repeated demonstration on the basis of the opinions of many taxpayers, withholding agents, experts, scholars and grassroots tax authorities in line with the principle of "providing convenience to taxpayers, regulating high incomes, facilitating tax collection and administration, and stressing on key management issues".

The Rules consist of eight chapters containing 44 articles, which define the specific operational methods of tax self-declaration from the aspects of the legal basis of the Rules, declarers, declaration content, declaration place, declaration period, way of declaration, declaration management, legal responsibility, and time of enforcement. Formulating and implementing the Rules can provide a system ensuring that the provisions related to the widening of the scope of self-declaration in the new law on individual income tax will be fully implemented.

2. In how many ways is individual income tax collected?

A: Individual income tax is collected mainly in two ways, i.e. withholding and payment of tax by agents and self-declaration of tax. Moreover, in some places, the method of entrusted collection has been adopted for some taxable income items in order to improve collection efficiency and provide convenience to taxpayers.

3. What is self-declaration of tax?

A: Self-declaration of tax refers to the following two cases:

(1) After the taxpayer receives taxable income, he/she shall calculate the amount of payable individual income tax according to taxable income items, fill the corresponding individual income tax declaration form truthfully within the declaration period specified in the tax law, and submit it to the tax authority to declare individual income tax.

(2) After the end of a tax year, the taxpayer shall fill the corresponding individual income tax declaration form truthfully within the declaration period specified in the tax law according to the items of taxable income generated in the whole year, amount, tax payable, paid tax and refundable tax, and submit it to the tax authority and deal with relevant matters.

4. Who need to declare taxes by themselves?

A: As is stipulated in Article 36 of the Implementing Rules of the Law of the People's Republic of China on Individual Income Tax (hereinafter referred to as "Implementing Rules") and Article 2 of the Rules, any taxpayer obligated to pay individual income tax within the territory of China in any of the following five cases shall declare taxes by himself/herself to the tax authority:

(1) With annual income of over RMB120,000;

(2) Receiving salary and remuneration from two or more employers in China;

(3) Generating income abroad;

(4) Generating taxable income without withholding agent;

(5) Other cases as specified by the State Council.

Among the five cases above, cases 1 and 5 are newly added in the revised Law on Individual Income Tax. However, "other cases as specified by the State Council" have not been clarified; therefore, the Rules stipulate that the specific rules on tax declaration in such cases shall be formulated otherwise according to the specific cases defined by the State Council.

5. If an individual with annual income of over RMB120,000 has paid taxes in full when receiving income, does he/she need to declare taxes at the end of year?

A: As is stipulated in the Implementing Rules of the Law on Individual Income Tax and the Rules, if an individual generates income of more than RMB120,000 within a tax year, he/she shall declare taxes to the tax authority at the end of year according to relevant provisions of the Rules, no matter whether he/she has paid individual income tax in full or has declared taxes to the tax authority by himself/herself when receiving incomes.

6. Why does an individual with annual income of over RMB120,000 need to declare taxes at the end of the year even though he/she has paid taxes in full?

A: Individual income tax is levied mainly by withholding the tax. Before the amendment of the Law on Individual Income Tax, people with high income were not legally obligated to declare taxes by themselves. After the amendment, any individual with annual income of over RMB120,000 shall bear the obligation of tax self-declaration, no matter whether he/she has paid the tax in full. The individuals with annual income of over RMB120,000 are the key payers of individual income tax. For these individuals, if their withholding agents do not withhold taxes or fail to withhold all taxes and individuals have no obligation of declaration, it will be hard to determine the legal responsibility of taxpayers who fail to pay payable taxes, and the enforcement of tax law and the compliance of taxpayers with tax law will be affected. Whereas China has adopted a classified individual income tax system, the Standing Committee of the National People's Congress amended the tax law to obligate high-income individuals to declare taxes by themselves. First, this will help cultivate the taxpayers' consciousness of paying taxes in good faith, clarify the legal responsibilities of taxpayers and enhance the compliance with tax law; second, it will help the tax authorities strengthen the administration of tax sources and the regulation of individuals with high income; third, it will help strengthen comparative analysis and further push forward the scientific and sophisticated administration of individual income tax; fourth, it will help create conditions and accumulate experience for the transition to a mixed tax system that combines comprehensive and classified tax systems in the next step.

7. How to understand the expression "annual income of over RMB120,000"? What types of income are included?

A: The Rules stipulate that annual income of over RMB120,000 means the sum of the following 11 income items reaching RMB120,000: salary and compensation, income from production and operation by individually-owned businesses, income from contract operation and operation under lease of enterprises or social service providers partly or wholly funded by state assets, compensation for labor services, author's remuneration, royalty, interest, dividend and bonus, income from lease of property, income from transfer of property, incidental income and other income.

8. What incomes may be excluded from annual income?

A: When calculating annual income of over RMB120,000, the tax-free income specified in the Law on Individual Income Tax and the Implementing Rules of the Law on Individual Income Tax and relevant pre-tax income that is allowed to be deducted may be excluded from annual income. These incomes mainly include the following three categories:

(1) Tax-free income specified in Items 1-9 of Article 4 of the Law on Individual Income Tax, i.e.:

(a). Rewards in respect of science, education, technology, culture, hygiene, sports and environmental protection, granted by provincial-level people's governments, departments and commissions under the State Council, and units at the level of army corps and above of the Chinese People's Liberation Army, and foreign and international organizations;

(b). Interest of treasury bonds and financial bonds issued by China;

(c). Subsidy and allowance provided by China pursuant to the unified provisions, i.e. the special government allowance, academician allowance, senior academician allowance granted in compliance with the requirements of the State Council and the provisions of Article 13 of implementing rules of the Law on Individual Income Tax, and other subsidies and allowances exempted from individual income tax as required by the State Council;

(d). Welfare, pension for the disabled and for the survivors, and relief fund;

(e). Insurance indemnities;

(f). Military severance pay and demobilization pay;

(g). Settling-in allowance, severance pay, retirement pay and allowance for retirees;

(h). Income of diplomatic representatives, consular officers and other officers of the embassy and consulate of each country in China that shall be exempted from tax in accordance with China's laws;

(i). The income that shall be free of tax as provided in the international conventions and agreements signed by China.

(2) Income that is generated from China and is allowed to be free of tax as provided in Article 6 of the Implementing Rules of the Law on Individual Income Tax.

(3) The basic old-age insurance, medical insurance, unemployment insurance and public housing reserve fund (three fees and one fund) contributed by units for individuals or by individuals in accordance with the provisions of Article 25 of the Implementing Rules of the Law on Individual Income Tax.

9. How to calculate annual income of each income item?

A: In light of the Law on Individual Income Tax revised in 2005, the Rules define annual income as the sum of 11 taxable income items the taxpayer obtains within a tax year in the territory of China. The taxpayer shall pay individual income tax for these income items; meanwhile, for the convenience of taxpayers and to simplify the calculation, the Rules clarify the specific method of calculating annual income of all income items as follows without prejudice to higher laws:

Salary and remuneration refer to the income of unreduced expense (RMB1,600 per month) and additional reduced expense (RMB3,200 per month), i.e. the remainder after deducting the subsidy, allowance and "three fees and one fund" granted according to the state's uniform provisions from all incomes relevant to service and employment (the incomes inside and outside the salary bill provided by the employer).

Production and operating income of individually-owned businesses refer to the taxable income. In case of account-checking and tax-collection, the annual income equals to the balance of total income in a tax year less costs, expenses and losses; in case of regular collection at fixed amount, the annual income is calculated according to the taxable income declared by the taxpayer or according to the aforesaid taxable income multiplied by taxable income rate. This method also applies to the calculation of the taxable income of sole proprietorship and partnership investors.

The income from contract operation and operation under lease of a public institution shall be the total income in a tax year, i.e. the operating profit generated from contract operation or operation under lease plus the salary and remuneration from the institution.

Income from compensation for labor services, author's remuneration and royalty refers to the income before deducting legal costs (RMB800 or 20% of income received each time).

Income from lease of property refers to the income before deducting legal costs (RMB800 or 20% of income received each time) and renovation costs (not more than RMB800 in a month).

Income from transfer of property refers to the remainder after deducting the original value of property and the taxes and reasonable expenses paid in the transfer process from the income from transfer of property, i.e. taxable income.

Income from interest, dividend and bonus, incidental income and other incomes all refer to the income before deducting any expenses.

For example, in 2006, a taxpayer received salaries of RMB144,000, special government subsidies of RMB2,400 granted by the State Council, treasury bond interest of RMB10,000, enterprise bond interest of RMB5,000, author's remuneration of RMB6,000, insurance indemnities of RMB3,500 and housing rental of RMB12,000, he/she paid "three fees and one fund" of RMB14,000 as required, and his/her employer paid "three fees and one fund" of RMB28,000 for him/her. The taxpayer's annual income to be declared shall be RMB153,000. The detailed calculation is as follows: salary income of RMB144,000 - "three fees and one fund" of RMB14,000 paid by the taxpayer as required + enterprise bond interest of RMB5,000 + author's remuneration of RMB6,000 + housing rental of RMB12,000. The special government subsidies of RMB2,400 granted by the State Council, treasury bond interest of RMB10,000, insurance indemnities of RMB3,500 and the "three fees and one fund" of RMB28,000 paid by employer for the taxpayer may be excluded from annual income, and the "three fees and one fund" of RMB14,000 paid by the taxpayer may be excluded from his/her salary income.

10. What materials does the individual with annual income of over RMB120,000 need to submit when declaring taxes?

A: When declaring taxes, the taxpayer with annual income of over RMB120,000 only needs to faithfully fill and submit the Individual Income Tax Declaration Form (applicable to taxpayers with annual income of over RMB120,000 and hereinafter referred to as "declaration form"), a copy of his/her valid individual identity certificate and other materials required by the tax authority, according to the income, tax payable, paid (withheld) tax, tax credit, tax to be supplemented or refunded, etc. within a tax year. Valid individual identity certificates mainly include ID cards of Chinese citizens, passports of overseas Chinese and foreigners, reentry permits of compatriots of Hong Kong, Macao and Taiwan, and identity certificates of soldiers of the Chinese People's Liberation Army.

11. Where can declaration forms be obtained?

A: The Rules stipulate that the tax authority shall have various declaration forms published on its website, or placed in the tax handling hall providing tax declaration services, for taxpayers to download or access from time to time free of charge. Therefore, declaration forms can be either downloaded freely on the websites of local tax authorities or obtained directly in the tax handling halls of local tax authorities free of charge.

12. What information shall the individual with annual income of over RMB120,000 provide when declaring taxes?

A: When declaring taxes after the end of a year, the taxpayer with annual income of over RMB120,000 generally needs only to provide relevant personal basic information, annual income of all income items, tax payable, paid (withheld) tax, tax credit, and tax to be supplemented or refunded. Relevant personal basic information includes name, type and number of the identity certificate or passport, occupation, employer, place of residence, valid address, postal code and telephone number in the territory of China. If the taxpayer is a foreigner, he/she shall also provide such information as nationality and the date of arrival in China, apart from the information above.

13. When shall the individual with annual income of over RMB120,000 declare taxes?

A: As is stipulated in the Implementing Rules and the Rules, after January 1, 2006, any taxpayer with annual income of over RMB120,000 shall declare taxes to relevant tax authorities within three months after the end of a tax year. That is to say, the taxpayer can declare taxes on any day in the period from January 1 to March 31 each year. Take this year for example, the taxpayer with annual income of over RMB120,000 in 2006 shall declare taxes to the local tax authority between January 1 and March 31, 2007.

14. Where shall the taxpayer with annual income of over RMB120,000 declare taxes?

A: The Rules stipulate that the places where taxpayers with annual income of over RMB120,000 declare taxes at the end of a year shall be determined in the following order according to different circumstances:

(1) If the taxpayer serves for a Chinese employer, he/she may declare tax to the tax authority in the place where the employer operates.

(2) If the taxpayer serves for two or more Chinese employers, he/she may declare tax to the tax authority in the places where either of the employers operates.

(3) If the taxpayer is not employed in China, and a part of his/her annual income derives from production and operating income of individually-owned businesses or income of contract operation or operation under lease from enterprises or social service providers partly or wholly funded by state assets (hereinafter called "production and operating income"), he/she may declare tax to the tax authority in any of the actual business places.

(4) If the taxpayer is not employed in China, and has no production and operating income, he/she may declare tax to the tax authority in the place of domicile. If the taxpayer has domicile within the territory of China inconsistent with his/her place of residence, he/she may declare tax to the tax authority in either of the places. If the taxpayer has no domicile in the territory of China, he may declare tax to the tax authority in the place of residence.

Place of residence refers to the place where the taxpayer has stayed for more than one year after leaving his/her domicile.

15. Do the individual with annual income of over RMB120,000 have to declare taxes in the tax handling hall?

A: The Rules stipulate that taxpayers may declare taxes in various ways, including declaration on the websites of local tax authorities and mail declaration. They can also go to the tax authority directly to declare taxes, or declare taxes by other ways as provided by the tax authority. Therefore, individuals with annual income of over RMB120,000 do not have to declare taxes in the tax handling hall. Instead, they can declare taxes in convenient and appropriate ways according to their own conditions.

It should be noted that if the taxpayer adopts data telegraph in tax declaration, he/she shall maintain relevant printed materials within the period as required by the tax authority; if the taxpayer adopts mailing in tax declaration, the receipt of registered mail of post office shall serve as basis for declaration, and the date of postmark shall be regarded as the actual declaration date.

16. May the individual with annual income of over RMB120,000 entrust other persons with declaration?

A: In view of the fact that the individual income tax involves various parties and is closely related to policy and the complicated calculation, it is difficult for some taxpayers to correctly handle tax declaration on their own. According to the stipulations of the Law on the Administration of Tax Collection and its implementing rules, taxpayers shall be allowed to entrust intermediary agencies or other persons to handle tax declaration for them. Therefore, the Rules clearly stipulate "the taxpayer may entrust intermediary agencies or other persons qualified for tax agency service with tax declaration".

17. Will the tax authorities hold taxpayers' information in confidence after handling tax declaration?

A: It is stipulated in Article 8 of the Law on the Administration of Tax Collection that tax authorities shall hold taxpayers' information in confidence according to the law. If tax authorities and tax officials fail to hold taxpayers' information in confidence according to the law and disclose their information, persons directly in charge and relevant persons directly responsible shall be subject to administrative penalty by the units they serve or relevant units according to the stipulations in Article 87 of the Law on the Administration of Tax Collection.

18. Shall the individual with annual income of over RMB120,000 bear legal responsibility if he/she fails to declare taxes within the tax declaration period?

A: The individual with annual income of over RMB120,000 shall bear legal responsibility if he/she fails to declare taxes within the declaration period. On the one hand, it is stipulated in Article 62 of the Law on the Administration of Tax Collection that if a taxpayer fails to declare taxes and submit tax materials within the specified period (within three months after the end of a tax year), he/she shall be ordered by the tax authorities to rectify within a time limit and may be fined not more than RMB2,000; if the circumstances are serious, he may be fined over RMB2,000 but not more than RMB10,000 . On the other hand, it is stipulated in Item 2 of Article 64 of the Law on the Administration of Tax Collection that where a taxpayer fails to make tax declaration, or fails to pay or underpays the tax payable, the tax authorities shall pursue the payment of the amount of tax he/she fails to pay or underpays and the surcharge thereon, and he/she shall also be fined over 50 percent but not more than five times the amount of tax he/she fails to pay or underpays.

19. Shall a taxpayer bear legal responsibility if he/she does not declare taxes truthfully in order to pay no tax or underpay the tax?

A: As is stipulated in Article 63 of the Law on the Administration of Tax Collection, tax evasion means that a taxpayer forges, alters, conceals or, without authorization, destroys accounting books or vouchers for the accounts, or overstates expenses or omits or understates incomes in the accounting books, or, after being notified by the tax authorities to make tax declaration, refuses to do so or makes false tax declaration, or fails to pay or underpays the amount of tax payable. Where a taxpayer evades tax, the tax authorities shall pursue the payment of the amount of tax he fails to pay or underpays and the surcharge thereon, and he shall also be fined not less then 50 percent but not more than five times the amount of tax he fails to pay or underpays. Additionally, it is stipulated in Item 1 of Article 64 of the Law on the Administration of Tax Collection that where a taxpayer fabricates the basis on which tax is assessed, he/she shall be ordered by the tax authorities to rectify within a time limit and shall also be fined not more than RMB50,000.

20. What legal responsibility shall a withholding agent bear if the taxpayer receives taxable income from the withholding agent and the withholding agent fails to withhold or collect the tax that should be withheld or collected?

A: It is stipulated in Article 69 of the Law on the Administration of Tax Collection that where a withholding agent fails to withhold or collect the amount of tax which should be withheld or collected, the tax authorities shall pursue the payment of the said amount, and impose on the withholding agent a fine of over 50 percent but not more than three times the amount of tax that should have been withheld or collected.

21. Are there punitive measures for some tax officials who, abusing their power, deliberately create difficulties for taxpayers?

A: It is stipulated in Item 2 of Article 82 of the Law on the Administration of Tax Collection that tax officials who, abusing their power, deliberately create difficulties for taxpayers shall be transferred from the post for tax collection and, in accordance with the law, be given administrative sanctions.

22. What legal responsibility shall a tax agent entrusted by a taxpayer with tax declaration bear if the taxpayer underpays taxes due to reasons on the side of the tax agent?

A: As is stipulated in Article 98 of the Rules on the Implementation of the Law on the Administration of Tax Collection, where a tax withholding agent violates tax laws or administrative rules or regulations, which results in a non-payment or underpayment of tax by the taxpayer, the taxpayer shall pay or make up the shortage in payment of tax or surcharge on tax in arrears, and a penalty of over 50 percent but not more than 3 times of the amount unpaid or underpaid by the taxpayer shall be imposed upon the tax withholding agent.

23. How can a taxpayer receiving salaries from two or more employers declare taxes?

A: As is stipulated in Article 8 of the Law on Individual Income Tax and Article 36 of the Implementing Rules of the Law on Individual Income Tax, if the taxpayer receives salary or compensation from two or more employers, he/she may declare tax to the tax authority in the place where any of the employers operates within seven days after receiving the income. When declaring taxes, the taxpayer shall submit the Monthly Individual Income Tax Declaration Form as well as other relevant materials as required by the tax authority.

24. How can a taxpayer receiving income outside China declare taxes?

A: According to the provisions of the Rules, a taxpayer receiving income outside China shall declare taxes to the tax authority in the place of domicile in China within 30 days after the end of a tax year. If the taxpayer has domicile in China inconsistent with his/her place of residence in the country, the taxpayer may declare tax to the tax authority in either place. If the taxpayer has no domicile in China, he/she may declare tax to the tax authority in the place of residence in China.

When declaring taxes, the taxpayer shall submit the Annual Individual Income Tax Declaration Form as well as other relevant materials as required by the tax authority.

25. Is there any change in the tax declaration methods for individually-owned businesses, sole proprietorship and partnership investors and the contractors and leaseholders of enterprises or social service providers partly or wholly funded by state assets after the promulgation of the Rules?

A: The day-to-day tax declaration of the three categories of taxpayers you mentioned is the same as before. However, in addition to the day-to-day tax declaration, those with annual income of over RMB120,000 shall declare taxes at the end of the year pursuant to relevant provisions of the Rules.

For the income generated by individually-owned businesses, sole proprietorship and partnership enterprises, the taxpayer shall declare tax within seven days after the close of every month, if the tax is prepaid on a monthly basis; if the tax is prepaid on a quarterly basis, the taxpayer shall declare tax within seven days after the close of every quarter. After the close of a tax year, the taxpayer shall summarize, calculate and pay tax within three months.

For the income from contract operation and operation under lease generated by the taxpayer at one time from enterprises or social service providers partly or wholly funded by state assets, he/she shall declare tax within 30 days upon receipt of the income; if the income from contract operation and operation under lease is obtained in several times within a tax year, the taxpayer shall declare the prepaid tax within the first seven days in the next months upon receipt of income, and summarize and pay the tax within three months after the close of a tax year.

26. Where do individually-owned businesses, sole proprietorship and partnership investors and the contractors and leaseholders of enterprises or social service providers partly or wholly funded by state assets handle day-to-day tax declaration during a tax year?

A: Individually-owned business declares tax to the tax authority in the actual business place.

For sole proprietorship and partnership investors setting up two or more enterprises, the tax declaration place may be determined depending on different conditions:

(1). If the enterprises are all sole proprietorship, the investor may declare tax to the tax authority in the actual business place of each enterprise.

(2). If any enterprise is set up on a partnership basis, the investor may declare tax to the tax authority in the place of residence.

(3). If any enterprise is set up on a partnership basis, and the place of residence of the individual investor is inconsistent with the business place of the enterprise, the investor may declare tax to the tax authority in the business place of any of the partnership enterprises.

27. Where do taxpayers declare taxes when receiving various other incomes?

A: Where a taxpayer receives various other incomes, he/she shall, within the first seven days of the next month after receiving the income, declare taxes to the local tax authority in the place where the income has been received, if the tax law requires the taxpayer to declare taxes.

28. Can the taxpayer change the tax declaration place?

A: Generally, the taxpayer shall not alter the tax declaration place at discretion. Where it is necessary to alter the tax declaration place under special cases, he/she shall report to the relevant tax authority for filing.

29. Can the taxpayer defer tax declaration?

A: As is stipulated in Article 37 of the Rules on Implementation of the Law on the Administration of Tax Collection, taxpayers with real difficulty in filing tax returns or submitting statements on tax withheld and paid or collected and paid within the prescribed time limit and requiring an extension shall, within the prescribed time limit, apply in writing to tax authorities for an extension, which shall be handled within the time limit approved by tax authorities. In case taxpayers are unable, due to force majeure, to file tax returns or submit statements on tax withheld and paid or collected and paid within the prescribed time limit, an extension is available. However, a report must be submitted to tax authorities immediately after the force majeure has vanished. The tax authorities will grant an approval after ascertaining the facts.

30. What services do the tax authorities provide to taxpayers when they declare taxes?

A: The tax authorities mainly provide the following services to taxpayers:

(1) The tax authority shall remind the taxpayer with annual income of over RMB120,000 to declare tax on his/her own by appropriate ways in the legal declaration period every year.

(2) The tax authority accepting tax declaration shall handle the procedures of collection, supplementation, refund and set-off of tax according to the declaration of taxpayers.

(3) The tax authority shall issue duty paid proof according to regulations for taxpayers who have completed tax declaration and submitted tax.

(4) The tax authority shall hold the tax declaration information of taxpayers in confidence.

31. Because it is the first time that taxpayers in China with annual income of over RMB120,000 are required to declare taxes by themselves, what measures will the tax authorities take in order to ensure the work will be carried out smoothly in the declaration period in 2007?

A: The period from January 1 to March 31, 2007 is the declaration period for taxpayers with annual income of over RMB120,000 to declare taxes of 2006. It is also the first year that these taxpayers are required to declare taxes by themselves according to the revised law on individual income tax after it was implemented in 2006. In order to carry out the work smoothly, the State Administration of Taxation recently issued the Notice on Working Hard to Handle the Tax Self-Declarations by Taxpayers with Annual Income of over RMB120,000 (GSF [2006] No.164), putting forward specific work requirements for tax authorities regarding the strengthening of organization and leadership, information dissemination and instruction, and the handling of declaration.

(1) Local tax authorities at each level are required to conscientiously analyze the work that should be done in all tax declaration processes, predict possible issues and difficulties, and formulate plans and measures to address them. Through elaborate organization and arrangement, the tax authorities shall push forward the work actively and steadily.

(2) The tax authorities will take full advantage of all dissemination channels and various means to strengthen information dissemination and instruction for taxpayers and help them understand the content, place, time, procedure and legal responsibility of self-declaration of tax.

(3) Before the end of the year, the tax authorities will use various means to distribute individual income tax declaration forms in the places convenient for taxpayers, including the websites and tax handling halls of tax authorities, and the units where there are many high-income people, so that taxpayers can obtain the declaration forms conveniently.

(4) The tax authorities shall provide special windows in the tax handling hall to handle tax declaration by taxpayers with annual income of over RMB120,000 or provide convenient facilities to receive tax declaration forms, so that taxpayers can submit tax declaration forms conveniently. Meanwhile, tax authorities shall provide special windows to handle the payment of overdue taxes and offer fast and convenient services when handling the payment of overdue taxes.

(5) The tax authorities shall provide various declaration channels so that taxpayers with annual income of over RMB120,000 can declare taxes conveniently. For example, if conditions permit, the tax authorities shall take full advantage of IT means to establish online declaration system and promote online declaration, mail declaration, etc.

(6) The tax authorities shall establish files for all taxpayers who have declared taxes, and exercise dynamic management of taxpayers by gathering related information.