Announcement of the State Administration of Taxation on Promulgating the Measures for Management of the Occupational Venture Capital of Tax Agent Firms

Announcement of the State Administration of Taxation on Promulgating the Measures for Management of the Occupational Venture Capital of Tax Agent Firms

Announcement of the State Administration of Taxation [2010] No. 14

September 14, 2010

For the purposes of promoting the regulated development of certified tax agent industry, enhancing tax agent firms' awareness of practice risks, and protecting taxpayers' legitimate rights and interests, the State Administration of Taxation formulated the Measures for Management of the Occupational Venture Capital of Tax Agent Firms, which are hereby promulgated and shall come into effect on October 1, 2010.

The Announcement is hereby given.

Measures for Management of the Occupational Venture Capital of Tax Agent Firms

Article 1 For the purposes of regulating the management of occupational venture capital of the tax agent firms, enhancing risk awareness, improving the responsibility guarantee mechanism, and protecting taxpayers' legitimate rights and interests, these Measures are hereby formulated in accordance with relevant provisions of the Interim Administrative Measures for Certified Tax Agents .

Article 2 Tax agent firms shall draw and use occupational venture capital in accordance with the provisions hereof.
The occupational venture capital of branches of the tax agent firms shall be uniformly drawn and used by the headquarters.

Article 3 Tax agent firms shall draw at least 3% of the income earned from their major businesses of the year as their occupational venture capital and establish a special account for accounting prior to the end of each accounting year.
The major businesses include tax-related attestation and tax-related services.

Article 4 During its existence, a tax agent firm shall ensure that the balance of its occupational venture capital shall not be less than 3% of the sum of income from its major businesses in the last five (5) years.
Where the occupational venture capital of a tax agent firm is less than 3% of the sum of income from its major businesses in the last five (5) years due to payment of compensation, the tax agent firm shall draw and make up the occupational fund prior to the end of the accounting year.
Occupational venture capital used to make compensation may be entered as expenditures before tax as per the actual amount.

Article 5 The occupational venture capital drawn by a tax agent firm may only be used for the following expenditures:
1.
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