Note! Tax credit evaluation is undergoing new changes! With hot Q&A

Q1: Which behaviors affect the tax credit rating

Answer:

I. Through the annual evaluation index scoring method

Annual evaluation indicator scores are calculated by deductions. In accordance with relevant laws and regulations, targeting whether taxpayers' tax-related behavior is in good faith and their attitude and degree regarding dishonest behavior, different deduction standards are set, with some deducting 1 point, and others deducting 3, 5, and 11 points. Where penalty amounts are involved, deduction values are also calculated using a progressive percentage-based method. The following deduction indicators appear frequently but are easily overlooked and require key attention:

1. Tax-related filing information

Failure to file tax returns within the prescribed time limit; failure to withhold and remit within the prescribed time limit; failure to submit financial statements within the prescribed time limit; failure to submit the financial accounting system or financial handling methods within the prescribed time limit; failure to report the opening (change) of accounts to the competent tax authority within the prescribed time limit, etc.

2. Tax (fee) payment information

Failure to pay taxes and fees due that have been declared or for which deferred declaration has been approved within the prescribed time limit; by the end of the assessment period, after tax filing, the taxpayer fails to pay taxes within the tax payment deadline, or the approved deferred payment deadline has expired and the taxpayer still fails to pay within the tax payment deadline; taxes withheld and collected but not remitted as required, etc.

3. Invoice and tax-control device information

Failure to issue invoices as required; failure to keep paper invoices as required and causing invoice damage or loss, etc.

4. Registration and Ledger Information

Taxpayers with abnormal taxpayer records; failure to keep account books, accounting vouchers, and other tax materials in accordance with regulations, etc.

II. Through direct grading

The direct rating method, i.e., behavior directly rated as D-level, applies to taxpayers with serious dishonest behavior. If you have any of the following circumstances, you will be directly rated as D-level

1. Conduct such acts as evading tax payment, evading recovery of tax arrears, fraudulently obtaining export tax refunds, or falsely issuing special VAT invoices, and having been convicted of a tax-related crime by judgment.

2. Where the acts listed in the preceding paragraph exist and do not constitute a crime, but the amount of tax evasion (avoidance of tax payment) is 100,000 yuan or more and accounts for 10% or more of the total tax payable for each tax type, or where there are tax violations such as evading recovery of tax arrears, fraudulently obtaining export tax refunds, or falsely issuing special VAT invoices, and the tax, late fees, and fines have been paid.

3. Failing to pay or fully pay the tax amount, late fees, and fines in accordance with the tax authority's handling conclusion within the prescribed time limit.

4. Refusing to pay taxes or refusing or obstructing tax authorities from carrying out tax audit enforcement in accordance with the law by violence or threats.

5. Acts violating VAT invoice management regulations or other invoice management regulations, resulting in other units or individuals failing to pay, underpaying, or fraudulently obtaining tax refunds.

6. Providing false filing materials to enjoy tax preferential policies.

7. Those who defrauded the state of export tax refunds and whose qualification for export tax refund (exemption) has been suspended and has not yet expired.

8. Having records of abnormal taxpayer status, or being registered or operated by the directly responsible person of an abnormal taxpayer.

9. Registered or operated by the directly responsible person of a Grade D taxpayer.

10. Other serious dishonesty circumstances determined by tax authorities in accordance with the law.

Q2: Under what circumstances can one apply for a supplementary tax credit evaluation?

Answer:

I. If the circumstances under which a taxpayer is not subject to evaluation are removed, or if there is an objection to not being evaluated in the current period, the taxpayer may apply to the competent tax authority for supplementary tax credit evaluation: 1. Being under investigation for suspected tax violations and the case has not yet been concluded. 2. Tax violations discovered according to law by audit or finance departments, and the tax authority is handling them according to law and has not yet concluded them. 3. Tax administrative reconsideration has been applied for or administrative litigation has been filed and has not yet been concluded. After the above circumstances are removed, the taxpayer may apply to the competent tax authority for supplementary evaluation.

II. Non-independent accounting branches may voluntarily participate in tax credit evaluation by applying for supplementary evaluation. After a non-independent accounting branch participates in credit evaluation through a supplementary evaluation application, the relevant provisions of the State Taxation Administration on tax credit management shall apply during the existence of the branch, and it generally may not be converted back to non-participation. III. Individual industrial and commercial households applying the general VAT calculation method may voluntarily apply to the competent tax authority for supplementary evaluation to participate in tax credit evaluation. After participating in credit evaluation, the relevant provisions of the State Taxation Administration on tax credit management shall apply during the existence period.

Q3: Under what circumstances can one apply for a tax credit re-evaluation?

Answer:

Where a taxpayer has objections to the tax credit evaluation result, it may apply to the competent tax authority for re-evaluation within the same year in which the tax credit evaluation result is determined, that is, apply for the tax credit re-evaluation for that year from the date the tax credit evaluation result is published to December 31 of that year.

Q4: Under what circumstances can one apply for a tax credit review?

Answer:

If you have objections to the indicator evaluation before the tax credit evaluation results are published, you may submit a review request to the competent tax authority in March of the year following the evaluation year. For example, in February 2024, if a taxpayer has objections to their 2023 evaluation indicators (indicators collected under the 2023 current-year evaluation plan), they may initiate a tax credit review with the competent tax authority in March 2024.

Q5: Under what circumstances can one apply for credit repair?

Answer:

1. The taxpayer has failed to handle tax filing, tax payment, document filing, and other matters within the statutory time limit and has already completed supplementary handling.

2. Taxpayers who fail to pay or fully pay taxes, late fees, and fines in accordance with the tax authority's processing conclusions, do not constitute a crime, and whose tax credit rating is directly rated as D, and who fully pay or make supplementary payments within 60 days after the expiration of the period specified in the tax authority's processing conclusions.

3. The taxpayer fulfills the corresponding legal obligations and the tax authority lawfully releases the abnormal taxpayer status.

4. A bankrupt enterprise or its administrator has paid taxes, late fees, and fines in accordance with the law during reorganization or settlement procedures, and has corrected the relevant tax credit dishonesty behavior.

5. Taxpayers whose tax credit is directly rated as D due to being determined as a major tax violation and dishonesty entity, whose dishonest entity information has not been published or publication has been stopped in accordance with relevant State Taxation Administration regulations, and who have no new tax credit dishonesty records for 12 consecutive months before application.

6. Registered or operated by the directly responsible person of a taxpayer with tax credit rating D, and for taxpayers whose tax credit associated evaluation is D, there have been no new tax credit dishonesty records for 6 consecutive months before application.

7. Taxpayers whose tax credit is directly rated as Grade D due to other dishonest conduct, and who have corrected the dishonest tax credit conduct, fulfilled their tax legal responsibilities, and had no newly added records of dishonest tax credit conduct for 12 consecutive months before the application.

8. Taxpayers whose tax credit was directly rated as D grade in the previous year and retained as D grade in the current year have corrected tax credit dishonest behavior, fulfilled tax legal responsibilities, or the dishonest entity information has been not published or stopped being published in accordance with relevant provisions of the State Taxation Administration, and there is no new record of tax credit dishonest behavior for 12 consecutive months before application.

Q6: Is there a time limit for applying for credit repair?

Answer:

1. For general deduction indicators: if the taxpayer voluntarily corrects the dishonest behavior and meets the repair conditions, it will be automatically repaired before the April annual evaluation without application; after the annual evaluation is completed, the taxpayer may apply for credit repair for indicators not yet repaired in the previous year (usually from May to December 31 each year).

2. For indicators that are directly rated as D in the current year's immediate evaluation: taxpayers may, after correcting the illegal act in the current year, proactively apply to the competent tax authority for credit repair (no need to wait until April of the following year).

Q7: Is there a difference between tax credit repair and tax credit re-evaluation?

Answer:

The fundamental difference is whether the taxpayer has any objection to the evaluation result.

1. Tax credit repair is the act of reducing indicator deductions, applicable after the taxpayer has no objection to the enterprise's evaluation indicators and voluntarily remedies the dishonest behavior.

2. Tax credit re-evaluation refers to the process of re-verifying indicators adopted when a taxpayer has objections to the evaluation indicators of their enterprise.

Note: In the formal evaluation plan for the same year, if credit repair has already been applied for and approved, re-evaluation cannot be applied for again.

Source: internet

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