The State Taxation Administration ("STA") has recently issued the Announcement on Matters Concerning the Recovery of Tax Payment Credit (the "Announcement"), with effect from January 1, 2020.
The Announcement mainly touches upon circumstances in which applications may be filed to restore its tax payment credit, conditions, criteria, time limit and procedures regarding the recovery of tax payment credit, recovery results, the relation between the recovery of tax payment credit and the review of tax payment credit, etc. Among others, Article 1 of the Announcement presents 19 types of dishonest tax payment behavior that are minor or have not caused serious social impacts, and the corresponding conditions to recover the tax payment credit, including 15 acts, including the failure to file tax returns, make due tax payments or file a record for relevant affairs within the prescribed time limit, and another four practices which will directly result in a Class D credit rating. Moreover, the Announcement requires that a taxpayer applying for recovering its tax payment credit shall submit the Application Form for Recovery of Tax payment Credit to the competent tax authority, and make a commitment that it will truly rectify its dishonest behavior. In case the tax authority finds the commitment made by a taxpayer is false, it shall revoke the recovery to its tax payment credit and give it penalty points pursuant to the Table of Adjustments to Tax Payment Credit Rating Indicators and Methods (for Trial Implementation).