Issued by: State Taxation Administration
Release Date: March 28, 2025
Links: https://www.chinatax.gov.cn/chinatax/n810356/n810961/c5239263/content.html

The main adjustments in this draft for soliciting opinions are as follows:
1. Protecting the Legitimate Rights and Interest of Enterprises and Optimizing of Business Environment
a. The tax payment requirement for administrative reconsideration has been cancelled, and a new rule has been established, which allows taxpayers to initiate reconsideration first, followed by tax payment, and then litigation if necessary.
b. It is clarified that in the field of bankruptcy, the liquidation order of tax claim settlement should comply with the provisions of the Enterprise Bankruptcy Law, and the provision that tax claims take precedence over mortgage and pledge rights will not be apply to bankrupt enterprises.

2. New Regulations Adapting to the Big Data Era and Digital Information
a. E - commerce and other online trading platform operators are obliged to submit the identity information of platform - based operators and practitioners, along with tax - related information, to the tax authorities within the time limit and in accordance with the directory list specified by the State Taxation Administration. If network platform operators fail to submit such information as required, they will be subject to fines of up to 2 million RMB and may be ordered to suspend business for rectification.
b. It is clarified that tax authorities have the right to use big data related to taxes to analyze and evaluate the taxable amount of taxpayers. During tax inspections, the tax authorities may access the electronic accounting system of enterprises to inspect electronic accounting materials. E-commerce platform operators and electronic payment service providers are required to provide information related to the e-commerce transactions and payments of taxpayers.

3. Changes in Tax Collection, Penalties, and Tax Inspections
a. The "late payment surcharge" (滞纳金) has been changed to "late payment fee" (迟纳金), with the rate remaining unchanged at 0.05% per day. It remains to be observed whether the change in the term will exempt it from the restriction in Paragraph 2, Article 45 of the Administrative Enforcement Law, which stipulates that "the amount of late payment surcharge shall not exceed the amount of the monetary payment obligation."
b. The “tax fraud” has been modified to “tax evasion” to align with the Criminal Law, resolving the long-standing issue of disjointed execution.
c. The subject of tax arrears enterprises being prevented from leaving the country has been expanded from the legal representative to include the main person in charge and the actual controller.
d. If the shareholder abuses the independent legal status of the legal entity and the limited liability of the investor, and takes measures such as withdrawing funds and deregistration, resulting in the tax authority's inability to recover the unpaid taxes or over-refunded taxes from the taxpayer, the tax authority shall have the right to collect taxes and late tax payment from the contributor if the circumstances are serious.
e. The punishment for invoice violations has been increased, with the maximum fine for issuing false invoices reaching up to RMB 5 million.
f. Penalties for "non-declaration resulting in non-payment or underpayment of taxes" other than tax evasion have been alleviated, with a three-tiered penalty based on the severity of the situation.
g. During tax inspections, tax authorities may also verify the accounting materials related to tax payment of the units and individuals from whom the taxpayer obtaining income, forming a cross-check of upstream and downstream data.
h. Tax authorities may issue written notices to non-bank institutions such as Alipay, WeChat and other third-party payment platforms requesting them to freeze the equivalent amount of tax payable in the taxpayer’s account.