Circular of the State Administration of Taxation on Strengthening the Tax Revenue Administration in Coal Industry

Circular of the State Administration of Taxation on Strengthening the Tax Revenue Administration in Coal Industry

Guo Shui Fa [2005] No 153

September 26, 2005

To the state and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan, and Yangzhou Taxation Training College:

Last year, the State Administration of Taxation by analyzing and studying special tax examination in coal industry of some regions discovered the pervasive nonstandard tax management and inefficient tax revenue in coal industry. In order to further strengthen the administration on tax by law and ascertain the responsibility of the tax revenue administration, solutions on strengthening tax administration in coal industry are hereby given as follows:

Article 1 Strengthening tax registration administration and solidifying routine supervision. in accordance with the principle of common registration and local administration. Any unit or individual undertaking coal production or sale shall perform tax registration in the state taxation bureaus, local taxation bureaus (or both) hereof. Tax registration shall be handled for the unit or individual with complete procedure. For the unit or individual with incomplete procedure yet having to undertake coal production, temporary tax registration shall be handled. Tax authorities shall initiatively supervise and put in order the tax administration of coal enterprises and solidify routine supervision on branches of enterprises and small-sized coal enterprises.
Supervision on the confirmation of common taxpayer shall be strengthened. Any one up to the standard of common taxpayer shall apply for the confirmation of common VAT taxpayer and establish and perfect account book. Where those up to the standard of common taxpayer fail to apply for confirmation procedure, the payable tax shall be calculated at sale amount VAT rate in accordance with the provisions of Article 33 in "Rules for the Implementation of the Interim Measures on Value-Added Tax of the People's Republic China", and no VAT output may be credit nor special invoice issued. Tax authorities shall analyze the performance of small- sized taxpayers and make due publicity of those enterprises in line with the prescribed conditions, conduct the examination and confirmation of common taxpayer and subsequently equip them with tax control anti-falsification facilities.

Article 2 Establishing coordination mechanism so as to advance the sharing of information. All levels of tax authorities shall actively win the support of local governments and establish coordination mechanism by means of joint meeting and joint dispatch with related departments and authorities such as the state taxation bureaus, bureau of local taxation, industry and commerce, safety production, price supervision; they shall acquire such information as handling of business license by industrial and commercial authorities, safety manufacturing license by safety production authorities, mining license by coal production and supervision authorities, resource depletion charges by coal supervision authorities, and thereby examine and put in order tax registration of coal enterprises and establish the record of related enterprises to avoid the negligence of tax collection and supervision.

Article 3 Strictly implementing tax administrator system and ascertaining administrator's responsibility.
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