New Measures | Facilitate Cross-regional Relocation of Taxpayers

The State Administration of Taxation (SAT) recently issued the Circular on Further Facilitating Cross-regional Relocation of Taxpayers and Serving the Building of a Unified National Market (Circular).

The document introduces a series of measures across the entire relocation process, ranging from “optimizing advance reminders” to “speeding up the handling process” and “improving after-services”. It aims to facilitate cross-regional relocation of taxpayers, continue to improve the tax-based business environment, and better serve the building of a unified national market.

1. Advance Reminders

[Proactive Push Guidelines, Optimized Advance Reminders]

The tax authorities shall strengthen the sharing of registration information with the Market Regulation Departments (Departments), and according to the registration information on the change of residence across[1] districts shared by the Departments, proactively push the guidelines on the handling of tax-related matters for cross-district relocation to taxpayers through the e-Tax Bureau and other channels, and remind the taxpayers to inquire about the handling of unsettled tax-related issues.

With open tax-related matters, such taxpayers are synchronously pushed to time-limited processing tips and urge time-limited completion.

1. Handling Process

[Breakdown of Different Scenarios, Speed Up the Handling Process]

1. Optimize the handling of open matters
   1. Matters handled at the request of the taxpayer

immediate push to the taxpayer to confirm whether to continue the process:

• If the taxpayer chooses to continue the process, the tax authority shall complete the case within a time limit.
• If the taxpayer chooses not to proceed, the tax authority shall immediately intermediate the tax-related matters.
  • Matters initiated ex officio

Complete following the specified time limits.

• Simplify invoice use procedures
  • For taxpayers using fully digitized electronic invoices

The information system automatically transfers their invoice credits to the place of relocation.

• For taxpayers using tax-control equipment

Relocate within the province

• Modify the information on the tax-control equipment online, without having to pay off the tax-control equipment at the tax authorities in the place before its relocation.

Relocate across the province

• Cancel the tax-control equipment remotely online, and directly apply for the tax-control equipment from the tax authorities in the place of relocation.
  • Or use fully digitized electronic invoices.

• Categorize tax-related risks
  • For taxpayers with outstanding risk assignments:

For low-risk ones,

immediate relocation procedures are carried out, and the risky tasks are pushed to the tax authorities in the place of relocation to continue processing.

For medium- and high-risk ones,

complete the risk response following the required time limit and immediately complete the relocation procedures.

• Optimize tax refund processing
  • The information system will automatically remind taxpayers of the existence of overpayment of tax for tax refund:

Choose to apply for a tax refund before relocation

Tax authorities shall handle it within a time limit.

Choose not to refund tax for the time being

Tax authorities counsel taxpayers to handle tax refunds after relocation.

1. After-Services

[Continuous Tracking & Counseling, Perfecting After-Services]

1. Tax authorities in the place of relocation
2. Provide “one-stop” relocation services.
3. Guarantee the continuation of rights and qualifications
4. And timely counseling to taxpayers to handle tax-related matters uncompleted before relocation.
5. Prohibitions
   1. Strictly prohibited from assisting in blocking the normal migration of taxpayers.
   1. Strictly prohibiting the launching of risky tasks in violation of the law to block the migration of taxpayers.
   1. Strictly prohibiting the imposition of additional conditions and thresholds to prevent taxpayers from relocating.

Documents and requirements that illegally hinder taxpayers from migrating across districts shall not be enforced and shall be reported to the higher tax authorities in a timely manner. Tax authorities and relevant responsible personnel who set up obstacles to taxpayers’ migration across districts in violation of the law will be dealt with seriously in accordance with regulations and discipline.

The Circular will take effect soon on 1 September 2024. The specific implementation details of the Circular have not yet been promulgated, and it is believed that there will still be differences in the implementation of the practical implementation of the various provinces, cities, and regions. We will continue to monitor the news and share further information at that time.

If you are interested in our topic or have any questions, please contact us.

[1] Since April 1, 2023, taxpayers are not required to report registration change information to the tax authorities after they have made changes at administration departments in accordance with the law; provincial tax authorities will automatically synchronize the change of registration information in the core levy management system of the Golden Tax III based on the change of registration information shared by the administration departments. «Notice by the State Taxation Administration of Optimizing Several Tax Collection Administration Service Items»