Notice regarding  ”Administrative Measures for Taxpayers” Credit Rating (Trial) (“Notice [2014] No. 40”) (关于发布《纳税信用管理办法(试行)》的公告), issued by  the SAT

The SAT has established a credit system to assess taxpayers’ tax performance.  Its key features are:

  1. Covered taxpayers: Enterprises  that have  completed tax registration and  engage in manufacturing or other business  transactions, and file tax  by  assessment.
  2. Rating: Taxpayers are rated as A, B, C or D.
  3. Evaluation: Tax bureaus are adopting a dynamic adjustment mechanism on  the evaluation of credit rating. Annual credit rating results will be completed  by April 2015, and allow taxpayers to check their own rating.
  4. Application of credit rating results:

Taxpayers with credit rating A will benefit from special treatments/incentives:

  • The tax authorities will announce a list of taxpayers with credit  rating A to  the public annually.
  • Taxpayers with credit rating A can collect three months’ special VAT invoices  from the authority in one time. If taxpayers need to adjust their special VAT  invoice amount, the tax authorities will immediately deal with  their  applications if the application documents are complete.
  • They can collect normal VAT invoices as required.

Taxpayers with credit rating  B will be subject to the normal administrative  measures and subject to the tutorship by the authority from time to time. Taxpayers with credit rate C will be subject to strict administrative and the  measures applied to taxpayers with credit rating D could be applied to them  selectively.

Taxpayers with credit rating D will be subject to strict administrative measures:

  • The names of taxpayers with credit rating D and  any direct persons  in  charge will be announced publicly. Other taxpayers registered or operating under the same persons in charge will also be classified as credit rating D.
  • Taxpayers with credit rating D  that collect special VAT invoices  will be  subject to the same policies  as general taxpayers’ during  a supervision  period. Normal VAT invoices  will be  strictly controlled. New normal VAT  invoices can only be collected once the used ones have been verified.
  • Export VAT refund applications of taxpayers with credit rating D will be  closely inspected.

Date of issue: July 4, 2014. Date of effectiveness: October 1, 2014.