State Administration of Taxation: Starting from July 14, it will simplify the handling of tax-related matters in the closure and cancellation of market entities

State Administration of Taxation

State Administration of Taxation

Announcement on Simplifying the Handling of Tax-related Matters in the Closure and Cancellation of Market Entities

State Taxation General Administration Announcement No. 12 of 2022

In order to thoroughly implement the decisions and arrangements of the Party Central Committee and the State Council on optimizing the business environment, the "Regulations of the People's Republic of China on the Registration and Management of Market Entities" (State Council Order No. 746 (hereinafter referred to as the "Regulations")), the tax-related matters regarding the simplification of the closure and cancellation of market entities are hereby announced as follows:

1. Simplification of tax reporting and tax returns during the closure of market entities

< p> (1) If a market entity has operational difficulties due to natural disasters, accidents, public health incidents, social security incidents, etc. and goes out of business in accordance with Article 30 of the Regulations, it does not need to report to the tax authorities separately. .

(2) If a market entity that is out of business is required to fulfill its tax and withholding obligations in accordance with the law, it may simplify its income tax returns as follows and no changes will be made in the current year.

1. If an enterprise that establishes a branch without legal person status declares and pays corporate income tax in advance on a monthly basis, after its head office goes out of business, the head office and all its branches can be adjusted from the next quarter. Prepayment declarations are made on a quarterly basis; if only a branch is closed, the head office and all its branches will not adjust the prepayment declaration deadline.

2. Enterprises that have not established branches without legal person status and declare prepayment of corporate income tax on a monthly basis can adjust to quarterly prepayment declarations starting from the next quarter after going out of business.

3. Market entities that declare prepayment of personal income tax on business income on a monthly basis can adjust to quarterly prepayment declarations starting from the next quarter after going out of business.

(3) Market entities that are out of business can choose to declare and pay resource tax (excluding water resources tax) on a case-by-case basis.

2. Tax returns during the period of suspension of business for abnormal households

For market entities that are recognized as abnormal households by the tax authorities, the above simplified taxation is not applicable during the period of suspension of business until the abnormal status is lifted. Declaration method.

3. Simplify the processing of tax clearance documents in the cancellation process of market entities

(1) Individual industrial and commercial households established and registered after the implementation of the "two-certificate integration" reform of business license and tax registration certificate, Those who apply for simple deregistration from the market supervision department and meet one of the following conditions are exempted from going to the tax authorities to apply for a tax clearance certificate:

1. Those who have not handled tax-related matters;

2. Those who have handled tax-related matters but have not received them, have not applied for invoices, and have no tax arrears or other outstanding matters.

(2) If a market entity that is subject to compulsory liquidation by the People's Court applies to the tax authority for issuance of a tax clearance document based on the People's Court's ruling to terminate the compulsory liquidation procedure, the tax authority will issue it immediately.

4. Standardize tax services and tax management

Tax authorities should provide convenient services for market entities to enjoy the suspension of business policy and handle cancellation of tax-related matters, and do a good job in accordance with relevant laws, regulations and institutional provisions. Tax management, risk prevention and control work.

This announcement will come into effect on July 14, 2022.

Announcement is hereby made.

State Administration of Taxation

June 14, 2022

Interpretation

Regarding the "State Administration of Taxation's Notice on Simplifying the Processing of Bankruptcy and Bankruptcy of Market Entities" Interpretation of the Announcement on Tax-Related Matters in the Cancellation Link

1. Under what background was the announcement issued?

Answer: In August 2021, the State Council issued the "Regulations on the Registration and Management of Market Entities of the People's Republic of China" (State Council Order No. 746, hereinafter referred to as the "Regulations"). On March 1, 2022 officially implemented on the day. The "Regulations" further improve the market entity registration system, systematically sort out and integrate the existing laws and regulations on the registration management of various market entities, legalize mature measures for commercial system reform, stipulate simple cancellation procedures, and add a suspension system.

In order to implement the "Regulations", ensure the connection between market entity registration and tax business systems, and serve taxpayers, this announcement is formulated.

2. Do market entities need to report to the tax authorities when they go out of business?

Answer: According to the Regulations, going out of business is an independent act of the market entity. It only needs to be filed with the registration authority in accordance with regulations. The tax authorities do not set tax preconditions for market entities to go out of business. Market entities do not need to go out of business. Separately report to tax authorities.

3. What are the main special policies for handling tax business during the period when market entities are closed?

Answer: During the period of business closure, market entities can enjoy facilitated tax policies and at the same time perform tax obligations and withholding obligations in accordance with the law. Compared with the period of normal operation, market entities are subject to simpler tax declaration policies during the period of business closure. They can choose to declare and pay resource taxes (excluding water resources tax) on a one-by-one basis. Qualified market entities can instead pay in advance on a quarterly basis. File corporate income tax and personal income tax returns. If a market entity resumes operations, it shall apply for resource tax declarations in the same manner as before the closure of business. It may declare corporate income tax and personal income tax in advance according to the pre-cessation deadline or continue to prepay on a quarterly basis. Among them, if it resumes operations in the year of closure and has adjusted the prepayment reporting period, it will no longer be required in that year. change.

4. How to file tax returns during abnormal periods of business closure?

Answer: For market entities that are recognized as abnormal by the tax authorities, before the abnormal status is lifted, the simplified tax declaration method stipulated in this announcement is not applicable during the period of suspension of business; after the abnormal status is lifted, the simplified tax declaration method shall not be applied during the suspension of business. The simplified tax filing method specified in this announcement can be applied.

5. When an individual industrial and commercial household established after the "integration of the two certificates" applies for simple cancellation, what are the conditions for being exempted from going to the tax authorities to obtain a tax clearance certificate?

Answer: For a long time, the taxation department and the market supervision department have jointly carried out the reform of simple enterprise cancellation to facilitate the exit of market entities. Individual industrial and commercial households registered after the implementation of the "integration of two certificates" reform can apply to the market supervision department for simple deregistration. If they meet one of the following conditions, they are not required to go to the tax authorities to apply for a tax clearance certificate and directly apply to the market supervision department for deregistration: Those who have not handled tax-related matters; those who have handled tax-related matters but have not received them, have not issued invoices, and have no tax arrears or other outstanding matters.

6. How to handle tax clearance documents if the People’s Court decides to terminate the compulsory liquidation procedure?

Answer: The "Regulations" stipulate that the relevant liquidation team can directly apply to the registration authority for cancellation of registration based on the People's Court's ruling to terminate the compulsory liquidation procedure. In this case, market entities can apply for deregistration of market entities without going through tax deregistration. However, in practice, some market entities require the issuance of tax clearance documents out of their own considerations. In order to meet the needs of such market entities to issue tax clearance documents and provide grassroots tax authorities with a policy basis to follow, the relevant policies are clarified here: market entities that have been ruled by the People's Court to be subject to compulsory liquidation shall hold the People's Court to terminate the compulsory liquidation procedures. If you apply to the tax authority for the issuance of a tax clearance document based on the ruling, the tax authority will issue it immediately.

7. In accordance with the requirements of the announcement, how should the tax authorities provide services and management?

Answer: The tax authorities should provide convenient services for market entities to enjoy the suspension of business policy and handle tax-related matters related to cancellation, and do a good job in tax management and risk prevention and control in accordance with relevant laws and regulations.

8. When will the announcement come into effect?

Answer: This announcement will be effective from July 14, 2022.