Supplementary Provisions of the Standing Committee of the National people's Congress Concerning the Imposition of Punishments in Respect of offenses of Tax Evasion and Refusal to Pay Tax

With a view to imposing punishments in respect of offenses of tax evasion and refusal to pay tax, the relevant supplementary provisions to the Criminal Law have been formulated as follows:

1. "Evasion of tax" means that a taxpayer fails to pay or underpays the amount of tax payable through the adoption of the means of forging, revising, concealing or destroying accounting books or supporting vouchers for the accounts without authorization, or of overstating expenses or not stating or understating income in accounting books, or of filing fraudulent tax returns. Where the amount of tax evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan, or where the taxpayer evades tax again after having been subject to administrative sanctions imposed by the tax authorities twice by reason of tax evasion, the taxpayer shall be subject to imprisonment or confinement with hard labour for a term of not more than three years as well as a fine of not more than five times the amount of tax evaded. Where the amount of tax evaded accounts for more than thirty percent of the amount of tax payable and is over Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment for a term of over three years but not more than seven years as well as a fine of not more than five times the amount of tax evaded.

Where a withholding agent fails to pay or underpays the tax which has been withheld or collected through the adoption of the means specified in the preceding Paragraph, and where the amount of tax evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan, a punishment shall be imposed on the withholding agent in accordance with the provisions stipulated in the preceding Paragraph.

Where the illegal acts specified in the preceding two Paragraphs have been committed several times and no punishment has been imposed, a punishment shall be imposed based on the accumulated amounts.

2. Where a taxpayer who has failed to pay the amount of tax payable adopts the means of transferring or concealing the property, resulting in failure on the part of the tax authorities to pursue the payment of the tax in arrears, and where the amount of the tax in arrears is over Renminbi 10000 Yuan but under Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment or confinement with hard labour for a term of not more than three years as well as a fine of not more than five times the amount of tax in arrears. Where the amount of tax in arrears is over Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment for a term of over three years but not more than seven years as well as a fine of not more than five times the amount of tax in arrears.

3. Where an enterprise or institution commits the offenses specified in Articles 1 or 2 hereof, a fine shall be imposed on the enterprise or institution in accordance with the provisions set forth in Articles 1 or 2 hereof, and the persons in charge and other personnel who assume direct responsibility shall be subject to imprisonment or confinement with hard labour for a term of not more than three years.

4. Where a taxpayer offers a bribe to tax officials and fails to pay or underpays the amount of tax payable, an investigation into the criminal liabilities of the taxpayer shall be conducted based on an offense of bribery, and the taxpayer shall be subject to a fine of not more than five times the amount of tax which has not been paid or underpaid.

5. Where an enterprise or institution fraudulently obtains a tax refund through the adoption of deceptive means such as fraudulently declaring the commodities it produces or operates as export goods, and where the amount of the tax refund which has been fraudulently obtained is over Renminbi 10000 Yuan, a fine of not more than five times the amount of the tax refund which has been fraudulently obtained shall be imposed on the enterprise or institution, and the persons in charge and other personnel who assume direct responsibility shall be subject to imprisonment or confinement with hard labour for a term of not more than three years.

Where an entity or individual other than those as prescribed in the preceding Paragraph fraudulently obtains a tax refund for export from the State, an investigation into the criminal liabilities of the entity or individual shall be conducted based on an offense of fraud, and a fine of not more than five times the amount of the tax refund which has been fraudulently obtained shall be imposed on the entity or individual. In addition to imposing a fine on an entity which has committed the offense specified in this Paragraph, an investigation into the criminal liabilities of the persons in charge and other personnel who assume direct responsibility shall be conducted based on an offense of fraud.

6. "Refusal to pay tax" means the refusal to pay tax by using violence or menace. A taxpayer who has refused to pay tax shall be subject to imprisonment or confinement with hard labour for a term of not more than three years as well as a fine of not more than five times the amount of tax the taxpayer has refused to pay. Where the case is serious, the taxpayer shall be subject to imprisonment for a term of over three years but not more than seven years as well as a fine of not more than five times the amount of tax the taxpayer has refused to pay.

In the case of refusal to pay tax by using violence which causes a person to suffer from serious injury or death, a serious punishment shall be imposed based on an offence of assault or manslaughter, and a fine shall be imposed in accordance with the provisions set forth in the preceding Paragraph.

7. Where the offenses specified herein are committed, the tax authorities shall pursue the payment of the amount of tax which has not been paid or underpaid, or is in arrears, or a taxpayer has refused to pay, or has been fraudulently obtained. Where a taxpayer is exempt from criminal punishment in accordance with the law, the tax authorities shall, in addition to pursuing the payment of the amount of tax which has not been paid or underpaid, or is in arrears, or the taxpayer has refused to pay, or has been fraudulently obtained, shall impose a fine of not more than five times the amount of tax which has not been paid or underpaid, or is in arrears, or the taxpayer has refused to pay, or has been fraudulently obtained.

8. The present provisions shall enter into force as of January 1,1993.

Promulgated by The Standing Committee of the National People's Congress on 1992-9-4