Tax Administration Law and Tax-Related Administrative Review (税收征管法与税务行政复议)
This domain tests tax registration, assessment, collection, inspection, enforcement, legal liability and the special reconsideration rules for tax disputes. The most examined issue is the relationship between tax payment disputes and administrative reconsideration.
Collection and liability
- Tax authorities assess tax. If tax is underpaid due to taxpayer calculation error, the authority may generally recover within 3 years; special circumstances extend to 5 years. For evasion, resistance or fraud, there is no time limit.
- A late fee of 0.05% per day applies from the overdue date.
- Enforcement includes distraint, seizure and bank account freeze; preservation measures require statutory approval.
- Taxpayers have rights to statement, defense, confidentiality and refunds.
Reconsideration
- Tax payment disputes: the taxpayer must pay the tax or provide a recognized guarantee, then apply for reconsideration within 60 days. Only after reconsideration may the taxpayer sue.
- Penalties, enforcement measures and other administrative acts may be directly reconsidered or litigated.
- Tax reconsideration generally goes to the superior tax authority. The 2023 Administrative Reconsideration Law preserves the tax payment prerequisite while strengthening hearing and mediation procedures.
- Decision types include maintain, order performance, revoke, change and confirm illegality.
Worked example
A company is assessed additional enterprise income tax of RMB 2 million and a late fee, plus a RMB 500,000 fine. It disagrees. It must pay the tax and late fee or provide a recognized guarantee, then apply within 60 days to the superior tax bureau for reconsideration. Only after the reconsideration decision can it sue within 15 days. The fine is separate: the company may apply for reconsideration or sue directly, and direct litigation generally follows the 6-month period.
Traps
- Suing a tax assessment without the payment or guarantee and reconsideration prerequisite.
- Missing the 60-day reconsideration application period.
- Assuming reconsideration automatically suspends enforcement.
- Confusing the fine with the tax payment dispute.