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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II CATEGORIES AND SCOPE OF INFORMATION EXCHANGE CHAPTER III CONFIDENTIALITY OF THE TAXATION INFORMATION CHAPTER IV RULES FOR THE ADMINISTRATION OF INFORMATION EXCHANGE Section 1 Administration Rules of Special Information, Automatic Information And Voluntary Information Section 2 Other Information Administration Procedures CHAPTER V SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. The present Rules are formulated according to the agreements concluded between the Chinese Government and a foreign government on the avoidance of double taxation as well as the fiscal evasion with respect to the taxes on incomes and properties (hereinafter referred to the taxation agreement), the Law of the People's Republic of China on Tax Collection and Administration as well as the detailed rules for implementation thereof (hereinafter referred to the Tax Collection Law) as well as the provisions of other relevant laws and regulations for the purpose of intensifying the international taxation cooperation and regulating the international exchange of tax information (hereinafter referred to information exchange). Article 2. The term "information exchange" mentioned in the present Rules refers to the act of exchanging the requested information between China and a contracting state to the relevant taxation agreement (hereinafter referred to a contracting state) for the purpose of correctly implementing the taxation agreement as well as the domestic laws on the taxes involved in the taxation agreement. Article 3. The information exchange shall be conducted within the scope of the obligations and rights prescribed by the taxation agreement. China enjoys the right to obtain the tax information from the relevant contracting state and is obliged to provide the tax information to a contracting state as well. Article 4. The information exchange shall be conducted by the authorities thereof or the authorized representatives decided in the taxation agreement. China's administrative tax authority is the State Administration of Taxation (SAT). The tax authorities at or below the provincial level shall assist the SAT in the administration of the information exchange within its administrative division, for which the specific work shall be assumed by the administrative department of international taxation or any other administrative department. Article 5. The information exchange shall be conducted after a taxation agreement comes into force and is implemented. The matters regarding the taxation information may retroactively those which occur when the taxation agreement came into force and began to be implemented. Article 6. Where the tax authority of China collects, investigates into or examines and handles the tax information, it shall be governed by the relevant provisions of the Tax Collection Law. CHAPTER II CATEGORIES AND SCOPE OF INFORMATION EXCHANGE Article 7. The categories of information exchange includes special information exchange, automatic information exchange, voluntary information exchange as well as the tax inspection of the corresponding periods, the visits of the authorized representatives and the information exchange within an industrial sector. The term "special information exchange" refers to an act whereby the administrative tax authority of a contracting state raises specific issues regarding domestic taxation cases, and requests the administrative tax authority of its counterpart contracting state to provide the relevant information and assist in investigation and verification according to the relevant taxation agreement, including: acquiring, investigating and verifying as well as confirming the identities of the relevant companies and individual residents, collecting or paying the relevant prices and expenses, transferring properties or providing the relevant information, materials and credence relating to the use of properties and tax return. The term "automatic information exchange" refers to an act whereby the administrative authorities of both contracting states, according to their agreement, automatically provide the relevant tax information on the acquisition of special incomes by taxpayers, mainly including interests, stock dividends, royalties, wages and salaries, all kinds of subsidies, bonuses, retirement pensions; commissions and labor remunerations; capital gains and business incomes. The term "voluntary information exchange" refers to an act whereby the administrative tax authority of a contracting state voluntarily provides to its counterpart of the other contracting state the relevant information that it has acquired in the taxation enforcement and is believed to be conducive to the implementation of the tax agreements of its counterpart as well as the information on its domestic laws on the taxes involved in the taxation agreement, including the prices and expenses collected or paid by companies and individuals, the transfer of properties or the provision of relevant information and materials relating to the use of properties. The term "tax inspection of the corresponding period" refers to an act whereby the tax authorities of the contracting states, according to their agreement on the tax inspection of the corresponding period, independently exercises their jurisdiction over tax collection within their administrative regions, and, at the same time, conduct examination on the tax-related items of the taxpayers who have common or related interests therein and communicate with each other or exchange the tax information acquired in their inspections. The term "visits of authorized representatives" refers to the acts whereby the administrative authorities of both contracting countries, according to their agreement on the visit of authorized representatives as well as based on their consensus, pay on-the-spot visits to the administrative region where its counterpart effectively exercises jurisdiction over taxation so as to acquire, investigate into and verify the relevant taxation information. The term "information exchange within an industrial sector" refers to the acts whereby the administrative authorities of both contracting states conduct investigation, research and analysis on the operating mode of an industrial sector, mode of capital operations, pricing methods and tricks of tax evasion and exchange the relevant taxation information with each other. Article 8. Unless it is separately stipulated by both contracting states, the scope of information exchange generally covers: (1) The scope of states shall be limited to those that have formally concluded with China a tax agreement with relevant articles on information exchange; (2) The scope of taxes is limited to the taxes prescribed in the taxation agreement, mainly including the taxes on incomes (properties); (3) The scope of persons shall be limited to the citizens of either or both of the contracting states; and (4) The scope of region shall be limited to the administrative regions where the contacting states effectively exercise their jurisdiction over taxation. Article 9. Under any of the following circumstances, the SAT may refuse the requests of its counterpart of a contracting state for the relevant information: (1) Where any request for information is irrelevant to the purpose of taxation; (2) Where any request for information is aimless; (3) Where any request for information fails to bear the signature of the administrative tax authority of a contracting state or its authorized representative; (4) Where any request for taxation information oversteps the relevant scopes regarding the persons, taxes and regions stipulated in the taxation agreement; (5) Where one of the contracting states requests for the provision of information so as to implement the relevant provisions of its domestic laws, yet its domestic laws conflict with the taxation agreement; (6) Where the provision of information may injure the state interest of China; (7) Where the provision of information may divulge any commercial secret; (8) Where the provision of information may incur any discriminatory treatment to any citizen or resident of China; (9) In the case of any information that cannot be acquired through normal administrative procedures according to the relevant laws and regulations of China; (10) In the case of any requested information that may be acquired with efforts through normal administrative procedures within a contracting state; or (11) Under any other circumstance where the SAT deems that the relevant clause on taxation information exchange has been violated. Article 10. The tax authorities at or below the provincial level shall not refuse to provide the relevant information to the SAT for any of the following reasons, and the SAT shall not refuse to provide the relevant information to a contracting state for any of the following reasons: (1) Where any requested information is irrelevant to China's taxation interest; (2) Where the information exchange between both contracting states is unequal in terms of quantity or quality; (3) Where the tax authority is obliged to keep confidential the information of taxpayers; (4) Where the relevant bank is obliged to keep confidential its depositors' information; (5) Where the taxation information is grasped by an agent, intermediary agency or any other third party; or (6) Under any other circumstance confirmed by the SAT. Article 11. Where the administrative tax authority at or below the provincial level needs the assistance of the administrative tax authority of a contracting state in providing taxation information for the purpose of implementing the taxation agreement as well as the relevant domestic laws on the taxes involved in the taxation agreement, it may file a request for special information exchange and report it to the SAT in a level-by-level manner: (1) Where it is necessary to acquire or verify the accounting books of the other party or of an overseas branch or sub-branch to a transaction, which is located in the other contracting state; (2) Where it is necessary to acquire or verify the records of banking accounts, sums, capital flow for the payment in the process of generating incomes from any transaction between a taxpayer and an overseas company or from a foreign country; (3) Where it is necessary to acquire or verify the tax returns of the other party to a transaction, which is located in the other contracting state; (4) Where it is necessary to know the basic information of a taxpayer or the other party relating to a transaction or the generation of incomes, including the actual address of an individual or company, identity of citizens, place of capital registration, and share controlling status of the company, whereas the aforesaid materials are in the hand of the other contracting state; (5) Where it is necessary to confirm the authenticity and legality of the tax returns provided by taxpayers; (6) Where it is necessary to confirm the association relationship between the taxpayers and overseas associated enterprises, to acquire the basic materials of the overseas associated enterprises of taxpayers, including the contracts, constitution, financial statements, application forms, auditing reports produced by Chinese CPA as well as the transactions between taxpayers and the associated enterprises; (7) Where it is necessary to know of the nature and sum of incomes such as the stock dividends, interests, royalties, capital gains, subsidies, bonuses and commissions that the taxpayer has acquired from or paid to a foreign country; (8) Where it is necessary to verify the authenticity of the price and sum between a taxpayer and an overseas company; (9) Where it is necessary to verify the authenticity of the incomes or expenses declared by a taxpayer; (10) Where it is necessary to verify the authenticity and legality of the overseas tax returns of a taxpayer; (11) Where it is necessary to acquire any other material that is required in the investigation into a tax-related case or in tax collection and administration and that may be in the hand of the other contracting party. A request for special information exchange shall be made in written form, and an English letter shall be attached and the relevant electronic text shall be submitted at the same time. Article 12. Where the SAT receives a request from any tax authority at or below a provincial level for instructions on any request of the administrative tax authority of a contracting state for information exchange, it shall conduct an earnest examination thereon. As to a request for special information exchange under any of the following circumstances, the SAT shall not grant approval or shall order it to be re-handled: (1) Under any of the circumstances prescribed by Article 9 of the present Rules; (2) Where the information provided fails to enable the administrative tax authority of a contracting state to effectively initiate the procedures for information collection and investigation; (3) Where the English letter fails to convey the information in an accurate or standardized manner; or (4) Under any other circumstance confirmed by the SAT upon examination. Article 13. The taxation information acquired by China from the administrative tax authority of a contracting state may be applied as the basis for taxation enforcement and can be produced in the litigation procedures. Regardless of the provisions of the preceding paragraph, where the administrative tax authority of a contracting state explicitly requests the tax authority of China to obtain its approval before producing the taxation information in the litigation procedures, the administrative tax authority of the contracting state shall report it level by level to the SAT, which shall negotiate with the administrative tax authority of the contracting state for handling. Article 14. Where there is any special requirement in the domestic law of China on the format or any other respect regarding the taxation information provided by the administrative tax authority of a contracting state to be produced as evidence, the administrative tax authority of the contracting state shall report it level by level to the SAT, which shall handle it through negotiations with the administrative tax authority of the contracting state. Where there is any special requirement in the domestic law of a contracting state on the format or any other respect regarding the taxation information provided by the administrative tax authority of China to be produced as evidence, it shall be handled through negotiations between the SAT and the administrative tax authority of the contracting state in coordination with the relevant administrative tax authority concerned. Article 15. Where any taxation case suspected of a crime is transferred to the judicial department according to law and if the judicial department needs to employ the taxation information provided by the contracting state evidences for conviction and the administrative tax authority explicitly requires that its approval shall be obtained beforehand, the tax authority shall inform the judicial department of the aforesaid requirements and report it to the SAT level by level so that the SAT may negotiate with the administrative tax authority of the contracting state to decide the scope and degree regarding the application of the taxation information. CHAPTER III CONFIDENTIALITY OF THE TAXATION INFORMATION Article 16. The taxation information shall be handled as confidential documents. The formulation, receipt and issuance, delivery, use, storage or destruction of taxation information shall be implemented according to the provisions of the Law of the People's Republic of China on the Confidentiality of State Secrets, the Provision of the Office of the Central Secret Committee and the State Secrecy Bureau on the Confidentiality Administration of State Secret Carriers, the Provisions on State Secrets and the Specific Classification of Confidentiality in Economic Work as well as the relevant laws and regulations. Article 17. The principles of determining the classification of confidentiality regarding taxation are as follows: (1) The taxation information shall be decided as secret; (2) Under any of the following circumstances, it shall be decided as confidential: 1. Where any taxation information involves tax evasion, tax fraud or any other violation of any tax law or regulation; 2. Where the administrative tax authority of a contracting state has any special requirement for confidentiality. (3) Where any taxation information involves any top state secret and if the divulgence thereof may led to particularly serious damage to the safety and interest of the state, it shall be decided as top secret; (4) Where the contents of taxation information involves any secrecy of any other department or industry, the classification of confidentiality thereof shall be determined according to the scope of confidentiality of the relevant administrative department. As to any information whose confidentiality is hard to be determined, the administrative tax authority shall report it level by level to the SAT for determination. Article 18. In the process of deciding the confidentiality, the term for confidentiality shall be determined at the same time. The term for keeping confidential the information of top secrecy is generally 30 years. The term for keeping confidential the information at the confidential level is generally 20 years. The term for keeping confidential the information at the secret level is generally 10 years. In the case of any special requirement for the term of confidentiality or in case any degree of confidentiality or term for confidentiality requires alteration, the administrative tax authority shall report it to its superior organ for approval and indicate the situation in the confidential document of taxation information. Article 19. Where the tax authority is investigating into, collecting or formulating the relevant tax information and if any taxpayer, withholder or any other party concerned declares that the matter under investigation involves any state secret and refuses to provide the relevant materials, the tax authority shall require it to provide the authentication certification on state secrets produced by the state administrative department of confidentiality. Where the tax authority reports any tax information, it shall make a statement on the aforesaid circumstances. Article 20. A registration book of confidential documents shall be kept for the receipt and issuance of tax information, which shall be numbered and registered in a document-by-document manner. Where any information of top secrecy is received, it shall be read and employed within the prescribed scope, for which the personnel who have access to the contents of tax information of top secrecy shall be recorded down. Where any tax information of top secrecy is delivered, it shall be conducted through the confidential channels and confidential communications. Article 21. Where any tax information is delivered, it shall be packed and sealed and be delivered according to the relevant provisions on confidentiality. Where any tax information is packed and sealed, the envelop thereof shall bear the seal of classification of confidentiality, the serial number as well as the names of the addressor and addressee. Article 22. The tax information and relevant documents formulated and issued shall be kept by special designated persons. As to the preservation of confidential carriers such as tax information, etc., safe and confidential places shall be selected and necessary equipments for confidentiality shall be set up. The tax information of top secrecy shall be preserved in the confidential office and be attended by special personnel. Article 23. Where any tax information and the relevant documents shall be put on archives, they shall be archived according to the relevant provisions of the state archives laws. Where any tax information and the relevant documents shall be destroyed, they shall, upon the approval of the relevant principles of tax authority, be destroyed according to the provisions on the destruction of confidential documents. Article 24. The functionaries in charge of tax information shall strictly abide by the principles of confidentiality, perform their obligations of confidentiality and shall receive the education and trainings of confidentiality before holding any post. Before leaving a post or an office, the functionaries in charge of tax information shall straighten out and transfer all the preserved tax information. A transfer shall be subject to the formal formalities for transfer, wherein the person that conducts the transfer and the person that takes over the tax information shall sign the checklist of information. Article 25. The tax information shall be formulated, processed and stored by means of special computers by special persons, for which effective measures for confidentiality such as the restriction of visits and data encryption shall be adopted for the aforesaid computers. Article 26. The translation of tax information shall be borne by the functionaries in charge of tax information. Under any special circumstance where translation by a special organization or person beyond the tax authority is required, a confidentiality agreement shall be concluded or other measures for confidentiality shall be taken so as to avoid any divulgence of tax information. Article 27. The tax authority may notify the purpose of information collection as well as sources and contents of information to the relevant taxpayers, withholders or any other party concerned, the relevant department or personnel that implement the corresponding domestic laws on the taxes involved in the taxation agreement and shall, at the same time, inform them of the obligations of confidentiality. Regardless of the provisions of the preceding paragraph, under any of the following circumstances and in the absence of the approval of the SAT, the tax authority shall not make any notification: (1) Where any taxpayer, withholder or any other party concerned that is grossly suspected of having committed any taxation irregularity and thus any notification may affect the investigation into the relevant case; or (2) Where a contracting state declares not to notify the relevant taxpayers, withholders or any other parties concerned of the sources and contents of tax information. Article 28. Where any taxation information is applied as evidences in the litigation procedures, the tax authority shall, according to the provisions of laws such as the Litigation Law, apply to the court for not conducting any open cross-examination in court. Article 29. Unless it is separately provided for by the taxation agreement, the tax information exchanged by both contracting states shall not be transferred or divulged to any other personnel or department as irrelevant to taxation. Where the auditing department, disciplinary examination department or anti-financial-crime department of the state requires any taxation information, the approval of the SAT shall be obtained before any provision. Article 30. No taxation authority at any level may disclose the sources and contents of the tax information in any announcement or notification on the cases involving taxation irregularity regarding tax information or in taxation documents such as the Decision on the Handling of Taxation or the Decision on Taxation Punishment. Article 31. The general work of information exchange or investigation and punishment based on tax information in the cases involving taxation irregularity shall not be publicized in any news media such as broadcasting, television, website and periodical. Where any publication is actually required, it shall be reported level by level to the SAT, provided that the sources and contents of the tax information are not disclosed in the publication materials. CHAPTER IV RULES FOR THE ADMINISTRATION OF INFORMATION EXCHANGE Section 1 Administration Rules of Special Information, Automatic Information And Voluntary Information Article 32. Where the SAT requests for or provides to the administrative tax authority of a contracting state or receives from the administrative tax authority of a contracting state any special taxation information, automatic tax information or automatic tax information (hereinafter referred to the three types of information), it shall be handled according to the following procedures: (1) Registration for archival filing. Contents shall be included such as the name, number of copies, date and medium of the administrative tax authority of the contracting state involved in the three types of information, for which the registration may be carried out in either a paper form or an electronic form. After the registration is completed, the originals of the letters from and replies to the administrative tax authority of a contracting state, the photocopies of the letters to and replies from the administrative tax authority of a contracting state as well as the originals of information shall be filed for archival filing; (2) Classification and examination. It shall be examined whether or not the three types of information satisfy the requirements for collection or investigation, including whether or not the information is complete, especially whether or not the matters subject to collection or investigation as well as the year are clear, whether or not the clue is accurate and whether or not it is under any circumstance prescribed in Articles 9 through 12 of the present Rules. As to any automatic information, it shall be transformed into an identifiable format, classified and counted on the basis of different regions and be recorded into the book of registration. Where any information is ready to be applied, be employed in investigation and punishment or in mutual exchange, it shall be classified as applicable information. Otherwise, it shall be classified as inapplicable information. As to any inapplicable information, if further investigation and verification is required in respect of any tax-related matter or sum, it may be decided through negotiations between the SAT and the administrative authority of the contracting state, for which a request for making up the relevant information may be set forth or the provincial tax authority may be required to provide the relevant supplementary information; (3) Transfer for investigation and verification. As to the applicable three information, it shall be forwarded by post or network as a confidential document to the provincial tax authority, and the date of transfer, method of transfer, the states involved, number of copies, and the term of review, shall be indicated in a form of official document; and (4) Request for (provision of) information. The three types of information that China requests for (provides) in cooperation with the administrative authority of the contracting state as well as the information on verification thereof shall be handled by encryption and be affixed with an English confidential seal. Article 33. As to a report on the examination of special information and an English letter presented by the tax authority at or below the provincial level, the SAT shall conduct an earnest examination. As to any special information that fails to be verified according to the request of a contracting state, it shall be returned to the verification entity for re-examination. The contents to be examined include: (1) whether the special information is provided on a legal basis; (2) whether it satisfies the requirements for contents that shall be presented in a Letter of Request for Special Information, including: the serial number of the Letter, date as well as the person that requests for an investigation; (3) according to the relevant information and materials relating to the request for special information and if the contracts, financial statements, invoices, photocopies of tax payment documents are under the progressing of verification and handling, whether it has given interpretations according to the relevant domestic laws and regulations, and whether the relevant names of laws and regulations, effective date and relevant clauses of related laws and regulations are provided; (4) Where any request relating to any special information is not satisfied, whether the unsatisfied matter is listed or an explanation for rejection is given; (5) Whether the currency and unit of measurement are indicated; (6) Where any tax return is involved, whether the tax return in China is indicated, including items such as tax rate, payment or withheld tax amount; (7) whether the year or period of tax payment is indicated; (8) whether it is indicated in the agreement that the information to be exchanged (certification documents or supportive documents) is, in whole or in part, notified to the taxpayers of the receiving party or to any other relevant party concerned; (9) whether it is indicated that the employment of information by the counterpart shall be fed back to China; and (10) whether the English confidential seal has been affixed thereto. Article 34. Where the tax authority at or below the provincial level receives any of the three types of information requested by or provided to a contracting state, it shall be handled according to the following procedures: (1) Registration for archival filing. Such contents shall be included: the serial number of the received document, the type of information, the number of copies, the contracting state, the term for investigation and punishment. At the same time, the tax authority shall supplement the registration of relevant contents in every link in the process of handling the three types of information, fill in the Statistical Form of International Taxation Information Exchange and report it to the SAT at the end of the year. The principles of one archive for one document shall be upheld in the registration for archival filing; (2) Classified examination. The tax authority shall examine whether the request for or provision of the three types of information meets the relevant requirements, including whether the information is complete, especially whether the items and years of collection or investigation is clarified, whether the clue is clear and whether it is under any of the circumstances prescribed in Articles 9 through 11. As to any inapplicable information or under any of the circumstances prescribed in Articles 9 through 11, the forwarded information shall be reported level by level to the SAT for handling; where it is an external request for information, the relevant tax authority shall be required to provide the supplementary materials or shall not approve the request for information; (3) Investigation and application: The tax authority shall, according to the requirements for and time limit of investigation, check the three types of information against the information on tax collection; where any suspected point or suspected taxation illegality is found, it shall conduct verification by means such as inquiry, examination and inspection according to the provisions of laws and regulations on tax collection. In the process of verification, A Draft of the Work of Examining the Special Information of the Contracting State, A Draft of the Work of Examining the Voluntary Information of the Contracting State and A Summary Form of Examining the Automatic Information shall be filled out respectively and shall, upon the required verification, be submitted together with a formal report to the SAT, to which an English reply shall be attached; (4) Transfer from a different place. Where any of the three types of information received by the provincial tax authority is not within its jurisdiction, a Letter of Transfer of International Taxation Information shall be produced and be affixed with the seal of the taxation authority before the relevant information is forwarded to the relevant provincial bureau and the SAT. After the relevant provincial tax authority receives this information, it shall be deemed as the information has been directly distributed by the SAT and shall be subject to investigation, and shall, according to the requirements of the present Rules, be reported to the SAT for examination and report; (5) Coordinated examination. Where the provincial tax authority receives any of the three types of information and thus needs the assistance or coordination of any other provincial tax authority, a Letter of Coordinated Examination of International Taxation Information shall be produced and be reported to the SAT for archival filing; and (6) Request or (provision of) information. Where the tax authority at or below the provincial level needs to any of the three types of information from the administrative authority of a contracting state or provides any of the three types of information thereto, a Draft of the Work of Requesting the Contracting State for Special Information, a Draft of the Work of Providing the Special Information to the Contracting State and a Form of Providing Automatic Information to the Contracting State shall be filled in and be handled according to the relevant requirements. Article 35. Where China or the administrative tax authority of a contacting state needs to further verify the relevant information in the process of employing the three types of information, it shall be handled according to the provisions of the present Rules. Article 36. After the tax authority that requests for information receives the relevant information forwarded by the SAT, if the clue is unclear and thus it is necessary to further request the administrative tax authority of a contracting state for the relevant information, items such as the requested matter, reason and date of reply shall be reported level by level to the SAT in written form, and an English letter shall be attached thereto at the same time. Where a contracting state fails to make a reply according to the required contents or term, the SAT shall urge the handling by letter in a timely manner. Article 37. After the tax authority at or below the provincial level makes investigation into and completes the exploitation of the three types of information, including the exploitation of the three types of information in the appraisal of taxation, auditing of external taxation as well as other administration of tax sources, the investigation and exploitation shall be summarized and written documents shall be produced for archival filing and verification. Where the SAT requires the reporting of the investigation and employment of the tax information, it shall be reported to the SAT in a form of official document. The contents reported mainly include the incomes of the taxpayers and their tax returns, conclusion upon handling as well as the relevant certification documents and materials, and an English reply shall be attached thereto at the same time. Where any party concerned involved in the verification and handling of the three types of information has departed from the territory or cannot be directly contacted for any other reason, a Notice on Taxation Items shall be delivered to his/its grown-up relatives or agents for acknowledgement upon receipt. Section 2 Other Information Administration Procedures Article 38. As to any request of the administrative tax authority of a contracting state for the tax inspection of the corresponding period, visits of authorized agents or information exchange within the industrial sector, it shall be decided, organized and guided by the SAT. Article 39. Where the tax authority at or below the provincial level needs, out of the requirements for collection, administration and examination of taxes, to request for the exchange of information on the taxation examination of the corresponding period, visits of authorized representatives or tax collection within an industrial sector, it shall be reported level by level to the SAT for approval. Article 40. The SAT shall conduct research on the necessity and feasibility of the applied matters and go through the formalities for examination and approval as well. In case an application is approved, the SAT and the administrative tax authority of the relevant contracting state shall organize the implementation of it through negotiations. Where it is necessary for the tax authority at or below the provincial level to participate therein, it shall be decided by the SAT. In case an application is not approved, the SAT shall distribute the documents to the tax authority at or below the provincial level to explain the reasons. CHAPTER V SUPPLEMENTARY PROVISIONS Article 41. Where any taxation information is lost due to any violation of the present Rules for the Administration of Information Exchange or any taxation information is divulged due to any violation of the provisions of the present Rules on the confidentiality of tax information, the relevant liable personnel shall be punished according to the relevant provisions, while the SAT shall also circulate a criticism of the tax authority that has lost or divulged the information. Article 42. Where it is under any of the following circumstances when the tax authority at or below the provincial level handles the three types of information, the SAT shall, in addition to urging the supplementary examination and re-examination by distributing documents, give a criticism in the annual work summarization of the taxation information according to the specific circumstance: (1) Where the tax authority fails to submit a report on examination of taxation information within the prescribed time limit; (2) Where the reported examination report is of poor quality, not thorough in examination and fails to satisfy the requirements of the work of collection and administration or external reply of the SAT; (3) Where it fails to report the automatic information to the SAT according to the prescribed time and quantity; (4) Where the reported automatic information is of poor quality and wrong format; (5) Where a request for special information that shall have been filed fails to be filed, thereby affecting the information exchange or tax collection. Article 43. The present Rules shall be simultaneously applied to the Arrangement between the Mainland of China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation with Respect to Taxes on Income and the Arrangement between the Mainland of China and Macao Special Administrative Region on the Avoidance of Double Taxation with Respect to Taxes on Income. Article 44. The present Rules shall come into force as of the day of promulgation. The Rules for the Administration on Taxation Information Exchange (for Trial Implementation) and the Rules for the Confidentiality of Taxation Information Exchange shall be simultaneously abolished. |
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