The General Administration of Customs ("GAC") has recently issued the Announcement on Matters Concerning the Handling of Voluntary Disclosure of Tax-related Irregularities (the "Announcement"), immediately effective from the date of issuance.
The Announcement provides clarity on the following matters. First, in case an import and export enterprise or entity voluntarily discloses its tax-related violations, no administrative penalty will be imposed, as stipulated by Article 27 of the Law of the People's Republic of China on Administrative Penalties, provided that one of certain conditions is met, such as "where the voluntary disclosure is made to the customs office within three months upon the occurrence of the tax-related irregularity, and it has taken proactive actions to eliminate the harmful consequence"; Second, for the purpose of the voluntary disclosure of tax-related violations to the customs office, an import and export enterprise or entity needs to fill out the Voluntary Disclosure Report, with the corresponding account book, vouchers and other relevant materials attached, and submit the same to the customs office with jurisdiction over the tax arrears or the customs office at its locality. Third, where an import and export enterprise or entity is given a warning or an administrative penalty of less than CNY500,000 as a result of the voluntary disclosure of its tax-related irregularity, such irregularity will not be added into the customs records for credit standing of enterprises. Furthermore, where a customs authorized enterprise makes the voluntary disclosure, during the period of customs investigation launched after the case is formally established the customs will not suspend the corresponding administrative measures it has been entitled to.