Relevant to resolving disputes between tax authorities and enterprises, the rules for tax administrative reconsideration are being made public for comments.

Summary of Key Points

The State Taxation Administration has recently released the "Tax Administrative Reconsideration Rules (Draft for Comment)," which includes 74 revisions and 32 new additions compared to the current rules. The main purpose is to align with the newly revised "Administrative Reconsideration Law" of 2024 and to adapt to changes in tax reforms and practical work. The key aspects of this revision are to expand the scope of reconsideration (to include social insurance fees and non-tax revenues), make applications more convenient (such as online applications and ensuring that all eligible applications are accepted), diversify the types of reconsideration outcomes, and relax restrictions on settlement and mediation. The goal is to better protect the rights and interests of taxpayers while regulating the behavior of tax authorities.

Detailed Explanation

1. Why revise the rules? —— To align with the law and adapt to new circumstances

In simple terms, this revision is necessary for two reasons:

• Legal alignment: The national "Administrative Reconsideration Law" was updated in 2024, and the tax authorities' reconsideration rules must be adjusted to ensure consistency with the higher-level legislation.
• Practical needs: Tax authorities are now responsible for collecting not only taxes but also social insurance fees and non-tax revenues (such as education surcharges and disability protection funds). These were previously not within the scope of reconsideration. Additionally, new issues arising from tax reforms (such as digital tax processing) require updated rules to address them.

The ultimate goal is to prevent tax authorities from acting improperly and to protect the legitimate rights and interests of taxpayers and fee payers, while ensuring that tax authorities operate in accordance with the law.

2. What can now be subject to reconsideration? —— Social insurance fees and non-tax revenues are included

Previously, reconsideration only covered tax-related actions, such as disputes over incorrect tax calculations or unreasonable fines. Now, the tax authorities' collection of social insurance fees and non-tax revenues is also within the scope of reconsideration. This includes:

• Social insurance fees: For example, if you believe you are not the intended payer, the scope of social insurance fees is incorrect (e.g., the company is charging you more than you should), the fee rate is incorrect (e.g., it should be 5% but is 8%), the basis for calculating the fees is incorrect (e.g., using your full salary instead of the appropriate base), the amount due is incorrect, or the late fees are excessive.
• Non-tax revenues: For example, if you believe the tax authorities have miscalculated education surcharges or cultural development fees, you can also apply for reconsideration.

In other words, any issue related to money collected by the tax authorities (whether it is tax, social insurance, or non-tax) can now be the subject of a reconsideration request.

3. Have applications for reconsideration become more convenient? —— Yes, with more user-friendly measures

This revision includes several improvements to reduce the hassle for applicants:

• Online applications: You no longer need to submit documents in person at the tax office; you can apply for reconsideration directly through online channels (such as the tax office's website or app).
• All eligible applications must be accepted: As long as your application does not clearly meet the requirements (e.g., you are not addressing the correct department or the deadline has not passed), the tax reconsideration authority must accept it and cannot reject it arbitrarily.
• Streamlining procedures: The reconsideration process is divided into "ordinary procedures" and "summary procedures." Simple cases with clear facts and minor disputes are handled more quickly through summary procedures, while more complex cases follow ordinary procedures.

These changes aim to make the reconsideration process easier for applicants and prevent them from being discouraged by cumbersome procedures.

4. What are the new types of reconsideration outcomes? —— More diverse and clearer outcomes

Previously, the only outcomes were "revocation" or "upholding." Now, additional types of outcomes have been added:

• Rejection of the request: If your application lacks merit (e.g., insufficient evidence or unreasonable demands), the reconsideration authority can directly reject it.
• Declaration of invalidity: If the tax authority's actions are illegal (e.g., charging without legal basis), the authority can declare the action invalid.
• Claim for compensation: If you have suffered losses due to the tax authority's errors, you can request compensation during the reconsideration process, and the rules specify how this should be handled.
• **Differences between "declaration of invalidity" and "revocation": In some cases where the action has already been carried out (e.g., a fine has already been paid), revocation may not be effective. In such cases, the authority can declare the action illegal and provide you with an official explanation.

These changes make the reconsideration outcomes more precise and suitable for addressing different types of issues.

5. Relaxation of settlement and mediation restrictions —— Negotiation is now possible

Previously, the scope of settlement and mediation in tax reconsiderations was limited to situations involving the tax authority's discretionary actions (e.g., flexible fine amounts) and administrative compensation. Now, these restrictions have been removed, and many disputes can be resolved through negotiation as long as both parties agree. For example, if you believe the social insurance fees collected by the tax authorities are incorrect, and the tax authority acknowledges the mistake during the reconsideration process, both parties can discuss how to resolve the issue (e.g., by refunding the excess amount or making up the difference). This can lead to faster resolution of disputes, saving time and effort for both parties and avoiding further conflicts.

In summary

This revision represents a significant improvement in the tax reconsideration rules, with a focus on protecting the rights and interests of taxpayers and fee payers. It makes the reconsideration process more convenient and reasonable. For ordinary individuals, there are now more convenient channels to address issues related to taxes, social insurance fees, and non-tax revenues, allowing for more efficient dispute resolution. If you have any feedback, you can submit it to the State Taxation Administration by September 30th.