With the release of the Administrative Measures for Tax and Fee Payment Credit (referred to as the "New Measures"), the Administrative Measures for Tax Credit (Trial) announced in 2014 and subsequent supplementary announcements (collectively referred to as the "Original Measures") are simultaneously abolished. Compared with the Original Measures, the main changes in the New Measures are as follows:

• Changes in Application Scope：The Original Measures applied to enterprise taxpayers engaged in production and operation and subject to tax assessment based on accounting records (referred to as "Business Entities"), while the New Measures apply not only to the aforesaid enterprise taxpayers but also to other types of taxpayers such as individual business operators, public institutions, and non-independent accounting branches, that voluntarily opt into the management of the New Measures.
• Optimization of the Starting Score for Annual Evaluation Indicators：Under the Original Measures, if a Business Entity lacks non-recurring indicators, the evaluation starts uniformly from 90 points. The New Measures refine the starting score criteria. If a Business Entity lacks non-recurring indicators but has complete tax and fee payment information in its recurring indicators, the evaluation starts from 93 points. If the tax and fee payment information in its recurring indicators is incomplete, the evaluation starts from 90 points.
• Clarification of Circumstances for Disqualification from Grade A: The third circumstance for disqualifying from Grade A is that "the value-added tax (VAT) payable is zero for 3 consecutive months or 6 cumulative months within the evaluation year due to non-normal reasons". The New Measures clarify the definition of "non-normal reasons", specifying that if the VAT payable is zero for 3 consecutive months or 6 cumulative months due to seasonal production and operation, enjoyment of policy-based tax exemptions, unused deductible input VAT, or enjoyment of VAT additional deduction policies, it shall not affect the Business Entity's eligibility for Grade A.
• Changes in Credit Restoration：

1. Enhanced rectification measures for minor dishonest acts.
2. Establishment of a gradual credit restoration mechanism for tax and fee arrears indicators, which comprehensively calculates restoration points based on the proportion of arrears paid and the timeliness of payment.
3. A new mechanism of "comprehensive credit restoration" is introduced. For entities that have rectified dishonest acts, fulfilled legal responsibilities, and maintained a clean record without of any new instances of non-compliance for more than 6 consecutive months since the last deduction of evaluation indicators in the evaluation year, the deducted scores shall be restored at a rate of 1 point per months of continued compliance (capped at a maximum of 11 points).
4. The restoration conditions for direct Grade D have been refined. Under the Original Measures, a Business Entity rated D must meet conditions such as maintaining a clean record without any new instances of non-compliance for at least 12 consecutive months to apply for credit restoration. While under the new measures, the "waiting" period for credit restoration is divided into three categories: 3 months, 6 months, and 12 months, based on factors such as the amount of tax evasion, the multiple of fines, the amount of fines, and the time of payment.