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	NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON THE PROVISIONS PROHIBITING THE PROVISIONS OF TAX LAW AND PROHIBITING THE PHE POLICY OF OF "DOUBLE DEDUCTION" ON BORDER TRADE

	(Letter No.830 [2004] of the State Administration of Taxation promulgated on June 21, 2004)


SUBJECT : BORDER TRADE; DOUBLE DEDUCTION
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 06/21/2004
IMPLEMENT DATE : 06/21/2004
LENGTH : 345 words
TEXT :

In order to encourage the development of border trade, the state has granted such preferential policy as the collection of the import value-added tax by half on imported goods by way of border trade, but some regions have not deducted the value-added tax according to that indicated in the customs duty paid certificate it obtained for the imported goods by way of border trade, but have resorted to "double deduction". The "double deduction" practice has violated the provisions of the existing value-added tax policy, impaired the unification and seriousness of the tax system, brought about hidden trouble to the tax collection administration, and is very likely to induce to crime of tax evasion and fraud, which shall be firmly held out and strictly corrected. Therefore, we restate as follows:

1. According to the provisions of Article 3 and 33 of the Law of the People's Republic of China on the Administration of Tax Collection, the tax authorities at various levels shall strictly implement the existing tax laws and regulations, and shall not effect any tax policy without authorization. And the tax authority shall not implement the decisions made by any other department, entity or individual without authorization, which conflict with the existing laws and administrative regulations, and shall report such conditions to the superior tax authority. In case any entity or individual implements such decisions without authorization or in violation of any of the provisions, the relevant person liable shall be subject to liabilities according to the relevant provisions.

2. All the local regions shall make an overall inspection on the deduction of import value-added tax, and immediately stop the implementation of "double deduction" policy. The import value-added tax money deducted and exempted on any imported goods shall not be computed and deducted as the tax money of next link imported items without exception.

3. The State Administration of Taxation will make occasional inspections on the deduction of value-added tax in areas of border trade, and will seriously punish those who continue to implement the "double deduction" policy and other policies that are not normative.