Summary of Key Points
The State Taxation Administration plans to introduce the "Tax Administrative Penalty Discretionary Benchmarks (2026 Edition)" with the aim of standardizing tax enforcement across the country and avoiding inconsistent penalties for similar cases. The new regulations specify the detailed standards for 66 types of penalties, which are categorized into five levels, with the severity of the penalties depending on the frequency of tax evasion, the attitude towards cooperation during inspections, and the proportion of the evaded taxes to the total taxable amount. The draft is currently in the public comment period (until August 13), during which the public can provide feedback through the official website or by mail.
Why Are These New Regulations Needed? — To Address Inequality in Penalties for Similar Cases
Previously, there were significant differences in the penalties imposed by tax authorities for tax evasion across different regions. For example, for the same amount of tax evasion (100,000 yuan), some areas might impose a 50% penalty (50,000 yuan), while others might impose a fivefold penalty (500,000 yuan). This wide range of discretionary power was seen as unfair by both businesses and individuals. The new regulations aim to establish a uniform standard for penalties, ensuring that the same violations receive similar consequences regardless of where they occur, thereby preventing unfair enforcement.
Penalties Are Tiered to Ensure Fairness
The new regulations divide all tax-related offenses into five levels: "minor," "slightly serious," "moderate," "serious," and "severe," each with clear criteria for determination. For instance:
- Minor: The first offense with particularly minor circumstances (such as forgetting to file a declaration but promptly correcting it) may result in no penalty (a list of such cases is included in the annex).
- Slightly Serious/Moderate/Serious/Serious: The severity depends on three factors: the number of previous penalties within five years, whether the taxpayer cooperated with tax inspections, and the proportion of the evaded taxes to the total taxable amount (only for tax evasion-related offenses).
How Are Penalties Determined?
The specific penalties are based on several factors, including the frequency of tax evasion and the taxpayer's cooperation during the investigation. Here are two common examples:
1. Failing to File a Declaration Leading to Underpayment of Taxes (e.g., an influencer deliberately not reporting income):
- First offense with cooperation: 50% to 1 times the amount underpaid.
- Second offense with cooperation: 1 to 3 times the amount underpaid.
- First offense without cooperation: 3 to 4 times the amount underpaid.
- Second offense without cooperation: 4 to 5 times the amount underpaid (maximum penalty).
2. Tax Evasion Through Fraud or Concealment of Income: In addition to the frequency and cooperation, the proportion of the evaded taxes to the total taxable amount is also considered:
- Proportion less than 10% with first offense and cooperation: Considered "slightly serious."
- Proportion over 10% with second offense and an evasion amount of more than 5 million yuan without cooperation: Considered "serious," with a penalty of 4 to 5 times the amount underpaid.
Three Key Features of the New Regulations
- Clear Structure: Each penalty is clearly defined, including the legal basis, level of punishment, applicable conditions, and specific standards, making it easy for tax officials to apply them consistently.
- Unified Standards: The same set of rules applies nationwide, ensuring that similar offenses receive similar penalties regardless of the location.
- Flexibility: Instead of fixed amounts in all cases, a range is used (e.g., 50% to 1 time the amount underpaid), allowing for some flexibility in handling special circumstances.
You Can Provide Feedback Too!
If you believe any aspect of the new regulations is unreasonable (e.g., a penalty standard is too strict or too lenient), you can provide feedback through two methods:
- Visit the official website of the State Taxation Administration and submit your comments.
- Write a letter to the "Policy and Regulations Department, State Taxation Administration," 68 Zaolinqian Street, Xicheng District, Beijing (postal code 100053).
The tax authorities will consider all feedback before making any final adjustments to the regulations.
These new regulations will have a significant impact on businesses and high-income individuals, such as influencers and business owners, as penalties for tax evasion will become more transparent and less lenient. For ordinary taxpayers, they will also experience fairer tax enforcement, reducing concerns about unfair treatment based on personal connections.