Abnormal taxpayer means taxpayers who proceed tax registration but fail to file and pay tax within the prescribed time limit.

1.       Identification of abnormal taxpayer

Taxpayers are obliged to file tax returns. The tax collection and management system will automatically identify taxpayers as abnormal if all the taxes are not declared in consecutive 3 months.

2.        Disposal measures for abnormal taxpayer

(1)	Tax authorities shall require the registered taxpayers who fail to file tax returns within the prescribed time limit to make corrections before the given deadline. If no corrections are made by then, tax authorities shall retrieve the invoices or stop providing invoices to the taxpayers, collect taxes and levy overdue fines according to China’s Tax Collection and Management Law.
(2)	If taxpayers fail to pay taxes or make full payment of taxes, overdue fines or penalties in light of the directions of tax authorities within the prescribed time limit, the tax credit appraisal of current year will be identified as D grade directly, the tax authorities will take the following measures:
	(a)	Tax authorities shall make public the list of D grade taxpayers and their direct liabilities, by whom other enterprises registered or operated shall also be identified as D grade directly;
	(b)	Taxpayer’s VAT invoices application shall be handled based on the policies for general taxpayers in probational period. The requisition of invoices shall be subject to handing in the old invoices for new invoices and strictly limited supply;
	(c)	Tax authorities shall strengthen the verification of export tax rebates;
	(d)	Tax authorities shall strengthen taxation evaluation, review all kinds of data and documents submitted by the taxpayers strictly;
	(e)	Tax authorities shall regard the taxpayers as key monitoring objects and improve the frequency of supervision and inspection, whose violation of tax laws and regulations shall not be applied to the minimum standards within the prescribed penalty range;
	(f)	Tax authorities shall inform the relevant government departments of the tax credit appraisal, suggest the departments to impose restrictions or prohibitions on the taxpayer’s business operation, investment and financing, land supply by the government, import and export, entry and exit of China, new company incorporation, engineering bidding, government procurement, honour obtain, safety license, production license, professional qualification, qualification verification and so on;
	(g)	The D grade will be kept for 2 years, and the tax credit appraisal shall not be identified as A grade in the third year;
	(h)	Tax authorities shall implement joint disciplinary measures with relevant government departments as well as take other strict management measures based on the actual situations.
(3)	For taxpayers who have no outstanding invoices that need to be turned in and with no tax payment duties, tax authorities shall cancel their tax registration certificates if the abnormal period last over 2 years.

3.       How to resume to normal taxpayer

The tax collection and management system will set the taxpayer’s status back to “normal” automatically if the abnormal taxpayers have accepted punishments, paid the overdue fines and filed tax returns.

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