The People's Bank of China (“PBC”) Shanghai Head Office; all branches and operations offices of the PBC and central sub-branches of the PBC in capital cities of provinces (autonomous regions); central sub-branches of the PBC in Dalian, Qingdao, Ningbo, Xiamen, and Shenzhen; the public finance departments (bureaus); the Financial Bureau of Xinjiang Production and Construction Corps; and the administrations of state taxation and local taxation of all provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning:
For the purposes of effectively completing the collection and payment of taxes to be paid into the state treasury, the PBC, the Ministry of Finance and the State Administration of Taxation have jointly developed the Measures for the Administration of the Collection and Payment of Taxes to Be Paid into the State Treasury, which are hereby issued to you for your compliance and implementation. Problems found during the implementation of these Measures shall be reported to the competent departments in a timely manner.
All branches and operations offices of the PBC, central sub-branches of the PBC in capital cities of provinces (autonomous regions), and central sub-branches of the PBC in Dalian, Qingdao, Ningbo, Xiamen, and Shenzhen shall, upon receipt of this document, forward it to the commercial banks and credit cooperatives serving as the agencies of the state treasury within their respective jurisdictions in a timely manner.
The People's Bank of China
The Ministry of Finance
The State Administration of Taxation
December 19, 2005
Annex
Measures for the Administration of the Collection and Payment of Taxes to Be Paid into the State Treasury
Article 1 These Measures are developed in accordance with the Law of the People's Republic of China on the People's Bank of China, the Law of the People's Republic of China on the Administration of Tax Collection, the Law of the People's Republic of China on Negotiable Instruments, the Regulation of the People's Republic of China on the State Treasury, and other laws and regulations, for the purposes of regulating the collection and payment of the taxes to be paid into the state treasury and ensuring the payment of taxes into the state treasury in a timely manner and in full amount.
Article 2 For the purposes of these Measures, “tax authorities” means the administrations and sub-administrations of state taxation and local taxation at or above the county level directly in charge of the collection of taxes.
Article 3 For the purposes of these Measures, “taxes to be paid into the state treasury” means non-cash taxes paid from other places and transferred from a third-party account that can not be directly paid into the state treasury. Specifically including:
(1) taxes paid into the state treasury via remittance from other places (including abroad);
(2) taxes paid into the state treasury through transfer from a third-party account:
(a) funds in arrears collected by the tax authorities from sub-debtors (i.e. debtors of taxpayers) by exercising the subrogation right and paid into the state treasury;
(b) amount that needs to be paid into the state treasury from the tax-related funds that are withheld and collected by the people's courts, the people's procuratorates, and the public security organs; and
(c) Taxes paid with cheques, promissory notes, bank drafts and other bills (hereinafter referred to as “bills”) to taxpayers by third parties in the case where the funds of taxpayers are frozen or their bank accounts are closed.
(3) other funds that cannot be directly paid into the state treasury as recognized by the State Administration of Taxation, the Ministry of Finance and the PBC.
Article 4 A special account for “taxes to be paid into the state treasury” shall be set up in a unified manner under the “funds in the state treasury to be settled” account (“fiscal revenue to be settled” account in the case of the state treasury agencies) for accounting of taxes to be paid into the state treasury. The state treasury may establish only one special account for “taxes to be paid into the state treasury” for the same tax authority and conduct account checking with it on a regular basis. Concurrently, the state treasury (including state treasury agencies, here and below) shall, within 5 days after each half year, submit the information on the collection and payment of taxes to be paid into the state treasury to the public finance department at the same level.
Article 5 A special account for “taxes to be paid into the state treasury” shall not be used for handling the refund of taxes, and its debit amount may only be the amount paid into the state treasury; and overpayment of taxes by a taxpayer shall be paid into the state treasury in full amount and the overpayment shall be directly refunded to the taxpayer from the state treasury according to the current provisions on the administration of tax refund.
Article 6 Where taxes are paid via domestic remittance, the tax authorities shall notify the taxpayers of directly remitting the taxes to the special account of the state treasury for “taxes to be paid into the state treasury,” enter the name of the receiving state treasury in the “Full Name of the Payee” column, enter the name of the remitter in the “Full Name of Remitter” column, and indicate “taxes paid by XX (taxpayer) to XX (tax authority)” in the “purpose of remittance” column.
Where taxes are paid via foreign remittance, the tax authority shall notify taxpayers of remitting taxes to the designated bank for handling foreign exchange settlement. Upon completing the settlement of foreign exchange, the designated bank shall transfer the taxes to the special account of the state treasury for “taxes to be paid into the state treasury” (indicating the names of the tax authorities and the taxpayers). The designated bank shall be determined by the state treasury upon consultation with the tax authorities.
Where bills are used to pay taxes and directly sent to a tax authority, the tax authority shall submit the tax payment bills to the state treasury on the same day or no later than the next day.
The state treasury shall not directly collect any bill submitted by a taxpayer.
Article 7 The funds collected through the special account for “taxes to be paid into the state treasury” shall be separately handled by the state treasury according to different methods of the settlement of funds.
(1) For funds directly remitted and transferred by the tax authority or the taxpayer to the special account for “taxes to be paid into the state treasury,” the state treasury shall adopt the following accounting entries:
Debit: high-value payments or local clearings
Credit: funds in the state treasury to be settled - special account for “taxes to be paid into the state treasury”
(2) Where the tax authority or the taxpayer uses cheques to pay taxes, the state treasury shall, upon receipt of the cheques (including the notice of settlement) and the income receipts, undergo the following procedures:
(a) Examining the relevant contents according to the relevant provisions of the Formalities of the People's Bank of China for Accounting of Payment Settlement.
(b) Presenting bills to the paying bank or the intermediary paying bank according to the provisions on the administration of local clearings. The accounting entries are as follows:
Debit: local clearings
Credit: funds in the state treasury to be settled - temporary receipt of local clearings
(c) In the case of dishonor of bills at specified time or cross-session dishonor of bills or failure of payment of the bills, the aforesaid accounting entry shall be reversed, and the bills shall be returned to the tax authorities or their holders; in the case where no bills are dishonored at specified time or cross sessions, it shall be accounted as receipt. The accounting entries are as follows:
Debit: funds in the state treasury to be settled - temporary receipt of local clearings
Credit: funds in the state treasury to be settled - special account for “taxes to be paid into the state treasury”
For any discrepancy between the aforesaid methods and the local provisions on the administration of local clearings, the local provisions shall prevail. Where cheque collection business is handled through the Bulk Electronic Payment System, it shall be handled according to the relevant provisions on the Bulk Electronic Payment System.
(3) Where the tax authority or the taxpayer adopts promissory note or bank draft for payment of taxes, the state treasury shall examine and handle them according to the relevant provisions of the Formalities for Accounting of Payment Settlement.
Article 8 After receiving the taxes to be paid into the state treasury, the state treasury shall send a receipt to which a seal of "business done" of the state treasury is affixed to the tax authority no later than the next day.
Article 9 The tax authority shall, on the current day or following day of receiving the receipt, issue a general tax pay-in warrant (hereinafter referred to as “pay-in warrant”) by tax categories and taxpayers according to the tax returns, the decisions on taxation treatment, and other certificates of tax collection, and pay taxes into the state treasury. In a pay-in warrant, the code and full name of the paying entity (person) shall be those of the taxpayer, the bank of deposit shall be the state treasury at the same level at which the special account for “taxes to be paid into the state treasury” is opened, and the account number shall be the number of the special account for “taxes to be paid into the state treasury.” The “special seal for tax collection” shall be affixed to a pay-in warrant. The paying entity (person) and handling person are not required to affix any seal.
Article 10 After examining and verifying a pay-in warrant upon receipt, the state treasury shall affix a seal of "business done” to the acknowledgement of receipt of the pay-in warrant, affix a special seal for business of the state treasury to the receipt page, and forward them with the check page to the tax authority, with other pages regarded as the accounting vouchers. The accounting entries are as follows:
Debit: funds in the state treasury to be settled - special account for “taxes to be paid into the state treasury” (XX tax authority)
Credit: XX budget revenue to be paid into the state treasury
The tax authority shall take the acknowledgement of receipt and the check page as the accounting vouchers and send the receipt page to the taxpayer as the voucher for tax payment.
Article 11 The tax authority shall establish a memorandum for taxes to be paid into the state treasury (see Annex 1) and a bill registry (see Annex 2).
The receipt of the state treasury shall be the receipt voucher for the memorandum for taxes to be paid into the state treasury and the check page of the pay-in warrant shall be the payment voucher, to chronologically reflect the receipt, expenditure, settlement and deposit of taxes to be paid into the state treasury on a case-by-case basis. The tax authority shall conduct account checking with the state treasury on a regular basis.
The tax authority shall chronologically fill in the bill registry on a case-by-case basis and reflect the receipt and handling of the bills throughout the process. For bills of funds failing to arrive in a timely manner, the tax authority shall find the reasons in a timely manner and conduct separate handling.
Article 12 At the end of a month, the state treasury shall prepare the statement of accounts (see Annex 3) by tax authorities and annex subsidiary accounts, and check the accounting with the tax authorities. Upon receipt of the statement of accounts, the tax authority shall, within three days, return the acknowledgement thereof to the state treasury, and shall find out the reasons in a timely manner and conduct separate handling, for any discrepancy.
Article 13 The year-end balance of the special account for “taxes to be paid into the state treasury” shall be zero. Where there is still book balance in the special account for “taxes to be paid into the state treasury” five days before the end of a year, the state treasury shall print the subsidiary accounts of the special accounts and submit them to the tax authority. The tax authority shall, on the current day of receiving the subsidiary accounts of the special account, issue a pay-in warrant on the basis of the book balance no later than the next day and undergo the formalities of payment into the state treasury. For funds received within five days before the end of a year, the state treasury and the tax authority shall contact each other in a timely manner and pay the full amount into the state treasury before the year-end settlement.
Article 14 A tax authority and its staff members that conduct one of the following acts during the process of payment into the state treasury of taxes to be paid into the state treasury:
(1) transferring funds for a taxpayer;
(2) changing the budgetary level and the budget accounts of taxes without permission;
(3) deferring the payment of, holding back, transferring, or misappropriating taxes; and
(4) other violations of laws and regulations.
shall be ordered by the relevant department to take corrective action according to the Law of the People's Republic of China on the Administration of Tax Collection and other relevant provisions, and the entity and relevant persons shall be held accountable; and shall be transferred to the judicial organ for punishment, where a crime is constituted.
Article 15 The state treasury of the PBC and the state treasury agencies of the commercial banks and credit cooperatives, and their staff members that conduct one of the following acts during the process of handling the business related to taxes to be paid into the state treasury:
(1) Deferring the payment of, holding back, transferring, or misappropriating taxes;
(2) providing convenience for any tax authority, knowing that it has violations of regulations; and
(3) other violations of laws and regulations.
shall be ordered by the relevant departments to take corrective action according to the Interim Measures for the Administration of Staff of the People's Bank of China, the Measures for the Penalties against Illegal Financial Acts, and other relevant provisions, and the entity and relevant persons shall be held accountable; and shall be transferred to the judicial organ for punishment, where a crime is constituted.
Article 16 The time limit for business handling involved in these Measures shall be calculated by working days, excluding statutory holidays.
Article 17 The handling of the business related to the taxes to be paid into the state treasury by state treasury agencies of commercial banks and credit cooperatives shall be governed by these Measures.
Article 18 Branches and sub-branches of the PBC and the tax authorities in all provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning may, in light of actual local circumstances, develop supplementary measures and submit them to the PBC, the Ministry of Finance, and the State Administration of Taxation for recordation.
Article 19 The right to interpret these Measures shall remain with the PBC, the Ministry of Finance and the State Administration of Taxation.
Article 20 These Provisions shall come into force on January 1, 2006.
Annexes*:
1. Memorandum of Tax Authorities for Taxes to Be Paid into the State Treasury
2. Bill Registry of Tax Authorities
3. Statement of Accounts and Acknowledgement of Statement of Accounts of the State Treasury
*For the annexes, please refer to the Chinese version.
