State Administration of Taxation

Circular of the State Administration of Taxation on Printing and Distributing the Measures for the Administration of Individual Income
Tax

Guo Shui Fa [2005] No.120

The administrations of state taxation and the administrations of local taxation of all the provinces, autonomous regions, municipalities
directly under the Central Government, and cities under separate state planning, and all the entities under the State Administration
of Taxation,With a view to strengthening and regulating the work of the tax authorities for the administration of collecting individual
income tax, promoting the scientific and detailed refined administration on individual income tax, and improving the quality and
efficiency of administration on individual income tax collection, Measures for the Administration of Individual Income Tax were
formulated by the State Administration of Taxation in accordance with the relevant provisions of the Law on Individual Income Tax,
and the Law on the Administration of Tax Collection combining with the reality of administration on tax collection, and hereby printed
and issued to you now. Please implement them earnestly, and report to the State Administration of Taxation in time any problem encountered
in the your implementation.

State Administration of Taxation

July 6th, 2005

Measures for the Administration of Individual Income Tax

Chapter I General Provisions

Article 1

For the purpose of strengthening and regulating the administration on the collection of individual income tax by tax authorities,
promoting the scientific and detailed refined administration on the collection of individual income tax, and incessantly improving
the efficiency and quality of collection administration, the present Measures are formulated in accordance with the Individual Income
Tax Law of the People’s Republic of China (hereinafter referred to as the Tax Law), the Law of the People’s Republic of China on
the Administration of Tax Collection (hereinafter referred to as the Tax Collection Administration Law) and the provisions of other
relevant tax laws and regulations.

Article 2

To strengthen and regulate the administration of collection of individual income tax collection, more efforts shall be put on perfecting
the administration system, improving the means of collection administration, and highlighting the focal points of administration.
This means the system of archive management on individual income, the system of ledgers for withholding tax and payment of withheld
tax, system of two-way declaration to tax authorities by taxpayers and withholding agents, and the system of taxation coordination
with the cooperation of all the departments of society shall be established. A uniform information system for individual income tax
management shall be researched, developed, and then brought into application as soon as possible, and the administration of individual
income tax shall be strengthened by making full use of information technology. Key administration of high- income earners, administration
on the headspring of tax sources, and the administration of all the taxpayers and in full amount shall be strengthened earnestly.

Chapter II System of Archive Management on Individual Income

Article 3

The system of archive management on individual income shall refer to the system in which the tax authorities establish archives for
each taxpayer recording his/her basic individual information, income and tax payment information as well as the relevant information
as required, and implement dynamic management on it.

Article 4

The administrative departments of all levels of tax authorities at or under the provincial level shall establish income and tax payment
archives for each taxpayer step by step as required, and implement a “One account” dynamic management.

Article 5

The administrative departments of all levels of tax authorities at or under the provincial level shall distinguish different types
of taxpayers and establish the corresponding basic information archives in light of the following contents:

1.

The contents of the archive for any employee taxpayer (excluding any shareholder, investor, or foreigner) shall include: name, type
and number of identity certificate, educational background, occupation, duty, email address, effective contact telephone numbers,
effective address, postal code, name of work entity, code of withholding agent, and whether he/she is a key taxpayer or not.

2.

The contents of the archive for any non-employee taxpayer (excluding any shareholders or investors) shall include: name, type and
number of identity certificate, email address, effective contact telephone numbers, effective address (address of work entity or
home), postal code, name of working entity, code of withholding agent, and whether he/she is a key taxpayer or not.

3.

The contents of the archive for any shareholder or investor (excluding any investors of sole proprietorships or partnerships) shall
include: name, nationality, type and number of identity certificate, effective address, postal code, permanent residence registration
place, effective contact telephone numbers, email address, total capital stock (investment) of the company, amount of individual
equity (investment), code of withholding agent, and whether he/she is a key taxpayer or not.

4.

The contents of the archive for a sole proprietorship, investor of a partnership, small industrial or commercial businesses or an
operator who contracts or leases an enterprise or institution shall include: name, type or number of identity certificate, name of
small industrial or commercial businesses(or sole proprietorships, partnerships, enterprise or institution under contract or tenancy),
type of economy, industry, business address, postal code, effective contact telephone number, number of tax registration certificate,
email address, ways of collecting individual income tax (verification or account checking), competent tax authorities, and whether
he/she is a key taxpayer.

5.

The contents of the archive for any foreigner (including both employees and non-employees) shall include: code of taxpayer, name (both
in Chinese and English), gender, place of birth (both in Chinese and English), year and month of birth, overseas address (both in
Chinese and English), nationality or region, type or number of identity certificate, residence permit number (number of the certificate
of Taiwan compatriots, number of Home-visiting Certificate), number of the certificate of labor and employment, occupation, domestic
position, overseas position, time of entry, tenure, estimated time for staying in China, estimated time for leaving China, name of
working entity of the foreigner in China and the number of tax registration certificate of the entity, address of his/her working
entity, postal code, contact telephone numbers, name of other working entities (include the address, telephone numbers, and ways
of contact) and number of tax registration certificate, name of the entity where the foreigner is engaged or with which the foreigner
signs a contract and number of the tax registration certificate thereof, address, postal code, contact telephone numbers, name and
address of his/her overseas entity (both in Chinese and English), place of payment (including whether it is paid at home or overseas),
and whether he/she is a key taxpayer.

Article 6

The contents of a taxpayer’s archive shall be originated from:

1.

Information on tax registration of the taxpayer.

2.

Report Form of for the Withholding of Individual Income Tax and the List Ledgers of Payment of Individual Income.

3.

Receipt of tax withholding and collection.

4.

Individual income tax return form.

5.

Relevant information provided by public departments of the society.

6.

Information on tax payment inspection by tax authorities and penalty records thereof. And

7.

Other materials mastered by tax authorities and other information materials provided by the taxpayer.

Article 7

The tax authorities shall duly renew and adjust the contents of the archives, and shall, according to the reality of the level of
local informatization and the improvement of the ability of tax collection administration, the changes of individual incomes, and
etc., incessantly enlarge the scope of archive management, until the goal of the administration of all the taxpayers and in full
amount is achieved.

Article 8

The tax authorities shall make full use of the archival materials of taxpayers to strengthen the administration on individual income
tax. It shall make comparison, analysis and tax payment assessment on individual archival materials of key taxpayers, key industries
and enterprises periodically to find out the conditions for any change of tax sources and the reasons thereof, discover any abnormal
condition in time, and take measures to plug up the leaks loopholes in the administration of tax collection.

Chapter III System of Ledgers for Withholding Tax and Payment of Withheld Tax

Article 9

The system of ledgers for withholding tax and payment of withheld tax shall refer to the system in which the tax authorities require
demand the withholding agents to submit all the basic information as required on the individuals whose income is paid by the withholding
agents, the detailed information on the payment of individual income and the withholding of tax and other tax-related information
in accordance with the Individual Income Tax Law and the other relevant provisions, and set up archives for each withholding agent,
so as to lay a foundation for conducting dynamic management afterwards.

Article 10

The tax authorities shall, according to the tax law and the other relevant laws and regulations, supervise and urge the withholding
agents to set up ledgers for withholding tax and payment of withheld tax as required, so as to correctly reflect the condition on
withholding of individual income tax.

Article 11

The tax authorities shall strictly examine and verify the tax payment materials filed by the withholding agents. Where any withholding
agent fails to fill in each column and each item of the Report Form for Withholding Individual Income Tax and the Subsidiary Ledgers
of Payment of Individual Income by person, or the contents filled in are incomplete, the competent tax authorities shall require
the withholding agent to fill them in once again. Where information management has been implemented, the tax authorities may incorporate
the Subsidiary Ledgers of Payment of Individual Income into the Report Form for Withholding Individual Income Tax.

The Report Form for Withholding Individual Income Tax shall be filled in with the information on the taxpayers who have actually paid
individual income tax; and the Subsidiary Ledgers of Payment of Individual Income shall be filled in with the information of the
taxpayers who have paid taxable income but have not reached the threshold of tax payment standard.

Article 12

The tax authorities shall make cross comparison of the payment of individual income submitted by the withholding agents and their
financial statements of the same period, and shall, upon finding any inconformity, require them to make an explanation, make an investigation
and handle according to law.

Article 13

The tax authorities shall set up archives for each withholding agent, the contents of the archives shall include: the code of the
withholding agent, name of the withholding agent, number of tax registration certificate, telephone number, email address, industry,
type of economy, address of the entity, postal code, name and contact telephone number of the legal representative (person-in-charge
of the entity) and the finance executive, tax registration organ, type of registration certificate or license, date of license issuance,
competent tax authority, amount of taxable income (classified and collected according to the items type of income), income from subject
to tax exemption, taxable amount (classified and collected according to the items type of income), number of taxpayers, amount of
tax having been paid, amount of tax to be made up or refunded, amount of tax deducted or exempted, surcharge for overdue payment,
fines, and number of tax payment receipt, and etc..

Article 14

The contents of the archive of a withholding agent shall be originated from:

1.

Information on the registration of tax withheld by the withholding agent.

2.

Report Form of for the Withholding of Individual Income Tax and the Subsidiary Ledgers of Payment of Individual Income.

3.

Receipt of tax withholding and collection.

4.

Relevant information provided by public departments of the society.

5.

Information of tax payment inspection by tax authorities and penalty records thereof. And

6.

Other materials mastered in the control of by the tax authorities.

Chapter IV System of Two-way Declaration to Tax Authorities by Taxpayers and Withholding Agents

Article 15

The system of two-way declaration to tax authorities by taxpayers and withholding agents shall refer to the system in which a taxpayers
and his withholding agents shall, according to the provisions of any law or administrative regulation, and the request put forward
by tax authorities according to any law or administrative regulation, file tax returns to the competent tax authority respectively,
and the tax authority shall make cross comparison and checking on the information of income and tax payment respectively provided
by the taxpayers and the withholding agents.

Article 16

Where a taxpayer shall file a tax return by himself/herself as prescribed by tax law and its implementation regulation and as well
as the other relevant laws and regulations, the tax authority shall require him/her to file a tax return to the competent tax authority
by himself/herself.

Article 17

When a tax authority accepts the tax return of a taxpayer or withholding agent, a preliminary examination and approval shall be made
on the time limit for filing the tax return, the taxable items, applicable tax rate, computation of tax and the integrity and accuracy
of the relevant materials. Where discovering any mistake, require the taxpayer or withholding agent to correct the tax return in
timely.

Article 18

The tax authorities shall make a cross comparison, and assessment and analysis on the contents of the two-way declaration to find
out if there exists any problem and handle such problem, if any, according to law in time.

Chapter V System of Taxation Coordination with the Cooperation of All the Departments of Society

Article 19

The system of taxation coordination with the cooperation of all the departments of society shall refer to that the tax authorities
shall establish a system of coordination and cooperation among all the departments relating to individual income and the administration
of individual income tax collection, and master the tax sources and the relevant information on tax payment in timely, as well as
formulate and implement measures for taxation coordination and taxation protection together, so as to form a network of taxation
coordination and taxation protection of society.

Article 20

The tax authorities shall lay emphasis on strengthening coordination and cooperation with the following departments: public security,
procuratorate, court, industry and commerce, bank, culture and physical health, finance, labor, housing administration, communications,
auditing, and foreign exchange control, and other departments.

Article 21

The tax authorities shall, through strengthening coordination and cooperation with the relevant departments, lay emphasis on mastering
the relevant information about the income of taxpayers.

1.

Contacting with the departments of public security to inquire about the conditions on the entry and exit of any individual who has
no domicile in China and his/her residence and staying in China, and implementing the system of preventing the person who owes tax
from exiting the territory, and mastering the information about the purchase of vehicles by the person, and other information.

2.

Contacting with the department of industry and commerce to inquire about the changes of the registration of taxpayers, and the changes
of shareholders and the capital stock of joint stock companies.

3.

Contacting with the department of culture and physical health to master the information about the various performances and competitions,
and etc., and to put into effect the obligations of the performance undertaking entities and the entities of physical health on withholding
taxes and other information.

4.

Contacting with the department of housing administration to inquire about the purchase and, sale and tenancy of houses, and other
information.

5.

Contacting with the department of communications to inquire about the conditions on gather information about taxies and freight trains
vehicles and their operations. And

6.

Cooperating with the department of labor to inquire about the labor and employment of individuals who have no domiciles in China.

Article 22

The Tax authorities shall actively create conditions to realize the sharing or periodical exchange of relevant information with the
other relevant departments.

Article 23

The tax authorities at all levels shall attach high importance to making great efforts to publicize and popularize knowledge of individual
income tax law and to incessantly improving the consciousness of citizens for paying tax according to law, and take it as a long-term
fundamental work and put it into the important agenda, and shall, in combination with the requirements for the work of administration
of tax collection, the hot spots paid which draw the attention to the society and the focal points of the local administration of
tax collection, strengthen close cooperation with the said departments. The tax authorities shall formulate a thorough plan for the
publicity work, make full use of various publicity media and means, and make publicity on individual income tax by taking flexible
and various ways.

Chapter VI Accelerating Information System Construction

Article 24

The tax authorities at all levels shall, within the general framework of the Phase III of the Golden Tax Project, and in light of
the requirements of “Integration” and the principle of “Planning as a whole, unifying the standard, giving prominence to the keynote,
implementing by distribution, integrating the resources, paying attention to the actual effect, strengthening administration and
ensuring the safety”, accelerate the information system construction on the administration of individual income tax collection, so
as to improve the quality and efficiency of the administration of individual income tax collection.

Article 25

According to the requirements of integrated construction, the core business system sectors of the tax agencies shall develop software
uniformly for the common part of the individual income tax that are of the same nature as and other types of tax, and software shall
be developed independently for the part of individual income tax with special characteristics. The State Administration of Taxation
shall, according to the characteristics of individual income tax, develop in advance such two subsidiary systems as the system of
withholding individual income tax and payment of withheld individual income tax (the terminal of withholding agents) and the basic
information management system (the terminal of taxation).

Article 26

The requirements for the system of withholding tax and payment of withheld tax (the part of withholding agents) shall be:

1.

Providing a convenient and fast tool for withholding agents to file tax returns;

2.

Being capable of transmitting the relevant information from the existing finance software and other software of the withholding agents;

3.

Computing tax automatically, and creating the various report forms automatically;

4.

Supporting multiple ways of filing tax returns;

5.

Facilitating the withholding agents to make statistics, consulting searches and printings;

6.

Providing the function of printing the Receipt of Tax Withholding and Collection; and

7.

Being convenient for tax authorities to accept the detailed withholding declaration of withholding agents, and accurately master the
basic data completely.

Article 27

The requirements for the basic information management system (the terminal of taxation) shall be:

1.

Establishing “One account” archives for tax payment of individual income to collect the materials concerning the basic information
and information on income and tax payment of withholding agents and taxpayers.

2.

Transmitting the information on the income obtained by an individual in more than two places and the tax payment information thereof
to the link of administration of tax collection.

3.

Sorting out from the “One account” archives the high income earners, high income industries, key taxpayers, and key withholding agents
and implementing key administration on them.

4.

Determining the truthfulness of the tax returns filed by taxpayers through collecting and comparing the information relating to the
income and tax payment of taxpayers.

5.

Providing decision-making support for strengthening administration on individual income tax and improving policies through establishing
various kinds of statistical indexes, calibers and by using statistical results.

6.

Establishing data application links with each department to provide information on the collection of other tax. And

7.

Printing the Tax Payment Receipt on Individual Income Tax of the People’s Republic of China to provide taxpayers with the basis of
tax payment.

Article 28

The tax authorities at the provincial level shall do a good job in integrating the existing software on the administration of individual
income tax collection. The tax authorities at or under the provincial level shall no longer develop any software on the administration
of individual income tax collection themselves in principle.

Chapter VII Strengthening Key Administration on High Income Earners

Article 29

The tax authorities shall bring the following personnel into the scope of key taxpayers: personnel in such high -income industries
as finance, insurance, securities, electric power, telecommunications, oil, petrol-chemical, tobacco, civil aviation, railways, real
estates, schools, hospitals, urban water supply and gas supply, publishing companies, road management, foreign-funded enterprises
and foreign enterprises, high and new technology enterprises, intermediary agencies, physical training club, and etc.; individuals
with high income such as investors of private economic sectors, film or television stars, singers, sports stars, and models, and
etc.; and personnel temporarily coming to China to make performances.

Article 30

The tax authorities at all levels shall single out certain individuals as key taxpayers from the following personnel to implement
key administration:

1.

Personnel who have higher income;

2.

Personnel who are more famous;

3.

Personnel who have more channels of income sources;

4.

Personnel who have more items of income;

5.

Professionals with no fixed entity employer; and

6.

Personnel who have great influence on the administration of tax collection.

Article 31

The tax authorities at all levels shall implement rolling dynamic administration measures to key taxpayers, and shall, according to
the reality of their localities, subjoin key taxpayers duly at an appropriate time each year, and incessantly enlarge the scope of
administration on key taxpayers, until they realize the administration of all the taxpayers and in full amount.

Article 32

The tax authorities shall set up special archives for key taxpayers, and implement key administration, and follow up the changes of
their income and tax payment at any time.

Article 33

The tax authorities at all levels shall make full use of the information on key taxpayers they mastered through archival administration,
and make comparison, assessment and analysis on the income and tax payment of key taxpayers periodically so as to discover unexpected
problem abnormalities and take measures to plug up the leaks in the administration in time.

Article 34

The tax authorities at the level of provinces (including cities under separately state planning) shall, before the end of July each
year and the end of January of the next year, have report the basic information and the income and tax payment of key taxpayers determined
in the half year and the whole year respectively filling in the Form of Collection on the Income and Tax Payment of Key Taxpayers
of Individual Income Tax by in Excel form and submitted to the State Administration of Taxation (Department of Income Tax Administration).

Article 35

The tax authorities at all levels shall strengthen their administration on the collection of individual income tax of investors of
small industrial or commercial businesses, sole proprietorships and partnerships and that of the individuals independently undertaking
labor service activities.

1.

Actively promoting the work for of establishing accounts for small industrial or commercial businesses, sole proprietorships and partnerships,
so as to regulate the finance accounting management and improve the finance accounting system; in areas where there are conditions
permit, fiscal tax-control devices shall be used to strengthen administration and monitoring on taxpayers.

2.

Perfecting and improving the work of verification of tax collection, and implementing verification on tax collection to taxpayers
that have no complete accounts and certificates vouchers and to whom tax collection through checking account is not available, and
making ration adjustment to the amount in time according to the management conditions of the taxpayers.

3.

Strengthening coordination and cooperation of the taxation system agencies to realize the sharing of information, establishing and
perfecting the system of individual income tax information exchange and coordination in the tax collection inspection at different
places to exchange information, so as to solve the difficulty in monitoring problem that one investor invests and obtains incomes
from two or more places but pays taxes by combining the incomes together

4.

Strengthening administration of individual investors who borrow money from the enterprises they invest, and collecting taxes in strictly
accordance with the relevant provisions on loans with the a term of more than one year but failing to be used for the production
of the enterprises concerned.

5.

Making strict management on the pretax deduction on the enterprises invested by individuals and the small industrial or commercial
businesses and making inspections periodically. And taxes shall be strictly collected as required in a strict way on expenditures
for the consumption or property expenditures that have nothing to do with the production and management, which are paid by individual
investors with the money of the enterprise capital for themselves, members of their families and other relevant personnel. And

6.

Strengthening the administration of tax collection on labor remunerations of such personnel who undertake performances, advertisements,
teaching and giving medical treatments, and pushing in an all-round way the measures for pre-deduction and pre-payment, and strengthening
administration on tax collection from the sources.

Article 36

The tax authorities shall strengthen special inspections on key taxpayers and independent taxpayers, and severely strike crack down
tax-related illegal and criminal acts. Each locality shall expose openly two or three illegal or criminal cases in respect of individual
income tax through relevant media each year.

Article 37

The tax authorities shall attach importance to and strengthen the routine inspection of individual income tax of key taxpayers and
independent taxpayers so as to discover leaks and weak links in the administration of tax collection in time, and shall formulate
and perfect systems and measures for the administration of tax collection. The routine inspections shall be organized and implemented
jointly by the department of tax collection administration and the department of taxation affairs policies of the tax authorities
under the provincial level.

A plan shall be made to implement routine inspections, which shall be carried out as required according to the prescribed procedures,
so as to prevent multiple and repeated inspections, and avoid affecting the production operations of taxpayers.

Chapter VIII Strengthening the Administration on the Headspring of Tax Sources

Article 38

The tax authorities shall strictly carry into effect the system of tax registration administration, and earnestly carry out the work
for the cleanup of those accounts that escaped from tax administration, so as to find out the real situation of the accounts.

Article 39

The tax authorities shall establish and perfect the archives of taxpayers and withholding agents in light of the relevant requirements,
and earnestly strengthen administration on the sources of individual income tax.

Article 40

The tax authorities shall continue doing a good job in the tax withholding, so as to improve the quality and level of tax withholding:

1.

Continuing implementing the existing rules and measures for the work of withholding individual income tax, and improving and perfecting
them incessantly in practice.

2.

Making cleanup and finding out the real situations of all the administrative entities, enterprises and public organization within
their own districts jurisdictions, and establishing on this basis the ledgers or basic accounts for withholding agents in light of
the indexes for the administration of tax payment archives, so as to implement follow-up administration on them.

3.

Pushing forward the system of detailed filing of tax returns on the detailed individual incomes paid by withholding agents in cooperation
with the administration on all the taxpayers and in full amount.

4.

Implementing key tax sources administration on the following industries: finance, insurance, securities, electric power, telecommunications,
oil, petrol-chemical, tobacco, civil aviation, railways, real estates, schools, hospitals, water and gas supply in the cities, publishing
companies, road management, foreign-funded enterprises, high and new technology enterprise

The General Office of the Ministry of Commerce

The Circular of the General Office of the Ministry of Commerce on Internet Publication for Ratification of Operation Qualification
of Foreign Labor Service Cooperation

January 6, 2005

The authorities in charge of commerce of all provinces, autonomous regions, municipalities directly under central government, and
cities specifically designated in the state plan:

With a view to implementing the system of making government affairs known to the public, enhancing the transparency of the ratification
of operation qualification of foreign labor service cooperation, facilitating the social supervision over applying enterprises, and
taking practical measures to protect the lawful rights and interests of labor service personnel sent abroad, in accordance with the
Measures for the Administration of Operation Qualification of Foreign Labor Service Cooperation, the Ministry of Commerce decides
the ratification of operation qualification of foreign labor service cooperation shall be publicized on internet; related issues
are hereby notified as follows:

1.

The Ministry of Commerce, after receiving the preliminary examination opinions of the authorities in charge of commerce of all provinces,
autonomous regions, municipalities directly under central government, and cities specifically designated in the state plan (hereinafter
referred to as “the local authorities in charge of commerce”) and whole materials of the applying enterprises, and confirming they
are eligible, shall publicize the Circular on Publication of Ratification of Operation Qualification of Foreign Labor Service Cooperation
(See the format in Appendix) on the public service column of foreign economic cooperation at the website of Ministry of Commerce,
and publicize the relevant information of applying enterprise.

2.

The publication period of the ratification of operation qualification of foreign labor service cooperation is five workdays.

3.

During the publication period, where the public question relevant issues of the applying enterprise, the Ministry of Commerce shall
require the local authorities in charge of commerce to carry out confirmation and put forward opinions of settlement; where there
are no questions, the Ministry of Commerce shall ratify the application of enterprise pursuant to the procedures.

Attachment: the format of “the Circular on Publication of Ratification of Operation Qualification of Foreign Labor Service Cooperation”

Attachment:The Format of “the Circular on Publication of Ratification of Operation Qualification of Foreign Labor Service Cooperation”The Circular
on Proposing to Ratify the Operation Qualification of Foreign Labor Service Cooperation of the ￿ߣߣߣ￿/span>

After examination and approval, the Ministry of Commerce proposes to ratify the operation qualification of foreign labor service cooperation
of the ￿ߣߣߣ￿company, and now publicizes the Certificate of Operation Qualification of Foreign Labor Service Cooperation and its
Annual Review Application Form. The publication period is five workdays, from ￿ߣ￿month)￿ߣ￿date)￿ߣ￿year) to ￿ߣ￿month)￿ߣ￿date)￿ߣ￿year).
If there is any question, please fax to the Department of Foreign Economic Cooperation of the Ministry of Commerce in the above-mentioned
period (010-65197992).

It is hereby notified.

Appendix: the Certificate of Operation Qualification of Foreign Labor Service Cooperation and its Annual Review Application Form (omitted)

The Ministry of Commerce

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