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[2020] No.4

The matters concerned are hereby announced as follows to continuously improve the business environment, support the development and growth of enterprises, and give full play to the important role of the bankruptcy system in regulating the exit of market entities and ensuring optimal allocation of resources.

I. Information Inquiry of Bankrupt Enterprise at a Designated Window

After the taxpayer enters the bankruptcy procedure, the administrator may choose to log in to Beijing Municipal Tax Service or go to the tax service hall for on-site handling to query the tax-related information, such as the debtor's tax declaration, tax payment ,and punishment.

When handling inquiry business online, the administrator shall log in to Beijing Municipal Online Tax Service as the debtor, submit the valid ID card of the legal representative of the administrator or the head, fill in the Application for Tax Information Inquiry and apply for inquiry.

When handling inquiry on the spot, the legal representative or the head of the administrator shall fill in the Application for Tax Information Inquiry and apply for inquiry at the write-off window of the tax service hall of the competent tax authority by presenting the written verdict of the people's court accepting and hearing the bankruptcy case, the written decision of the appointed administrator, and the original (returned after being checked) and copies of his/her valid identity card. When handling inquiry on the spot, the person authorized by the legal representative or the head of the administrator shall fill in the Application for Tax Information Inquiry and apply for inquiry at the write-off window of the tax service hall of the competent tax authority by presenting the written verdict of the people's court accepting and hearing the bankruptcy case, the written decision of the appointed administrator, the copies of the valid identity card of the legal representative or the head of the administrator, the original (returned after being checked) and copy of the valid identity card of the handling personnel, and the authorization letter signed by the legal representative or head of the administrator.

Where the originals of the written verdict or the written decision fail to be provided due to special circumstances, copies may be provided, provided that a statement with the signature and seal of the legal representative or head of the administrator shall be issued at the same time.

The tax service hall of the competent tax authority shall assist the administrator in handling the inquiry. In principle, the delay shall not go beyond 3 working days in case of special circumstances.

II. Streamlining of Procedures of Removing Abnormality

Prior to the date when the people's court rules on and accepts the application for bankruptcy, the debtor's account is recognized as an abnormal one by the competent tax authority, making the debtor fail to make tax declaration. In this case, the administrator may go to the competent tax authority to handle the procedures of removing abnormality with the written verdict of the people's court on accepting and hearing the bankruptcy case and the written decision of the designated administrator.

The administrator shall, according to the account book of the debtor taken over, truthfully reapply tax declaration during the abnormal period of the account before the bankruptcy application is accepted. The administrator may temporarily reapply tax declaration based on zero declaration in the event that he/she does not take over the debtor's account books or know the actual situation of the debtor during the abnormal period of the account before the bankruptcy application is accepted, or fails to find that the debtor has any taxable behavior. The competent tax authority shall go through the procedures for removing the abnormality of the account in accordance with the law. In the bankruptcy proceedings, if the administrator finds that the debtor is obliged to pay tax during the abnormal period of the account before the acceptance of the bankruptcy application, he/she shall truthfully report to the tax authority in a timely manner.

The competent tax authority shall timely declare the creditor's rights to the administrator for the fines and taxes to be paid before the acceptance of the bankruptcy application.

III. Optimization of Procedures for Invoice Receipt

From the date when the people's court appoints the administrator, the administrator shall properly manage and use invoices following the Administrative Measures of the People's Republic of China for Invoices. Where it is necessary to use invoices for the performance of contracts, disposal of the debtor's property ,or the continuation of business in the bankruptcy proceedings, the administrator may use the original invoices of the debtor. In case the debtor has no invoice, the administrator may apply to the competent tax authority in the name of the enterprise for the issuance of invoices or acting as an agent for invoicing.
In the bankruptcy proceedings, if the debtor's tax control equipment and invoices are found to have been lost before take-over, it is necessary to report to the competent tax authority on time and report the loss and make a reapplication.

The competent tax authority shall declare the creditor's rights to the fines arising from the loss of tax control equipment and invoices.

IV. Optimization of Tax-paying Credit Repair

After the people's court rules on the approval of the reorganization plan, the enterprise to be reorganized may, by holding the original (returned after being checked) and copy of the written verdict of the people's court approving the reorganization plan, fill in the Application for Tax-paying Credit, and submit the application for tax-paying credit repair to the tax source management office of the competent tax authority. Where the originals of the written verdict fail to be provided due to special circumstances, copies may be provided, provided that a statement with the signature and seal of the legal representative or head of the enterprise to be reorganized shall be issued at the same time. The tax source management office of the competent tax authority shall accept the case according to the regulations, complete the audit within 3 working days, and give feedback on credit repair results for the enterprise to be reorganized.

Upon implementation of the reorganization plan, the reorganized enterprise may apply to the tax source management office of the competent tax authority with the written verdict of the people's court on approval of the reorganization plan, the reorganization plan and the original (returned after being checked) and copies of the supervision report issued by the administrator. Where the written verdict, reorganization plan, and supervision report fail to be provided due to special circumstances, copies may be provided, provided that a statement with the signature and seal of the legal representative or head of the enterprise reorganized shall be issued at the same time. The tax source management office of the competent tax authority shall re-evaluate the tax credit rating of the reorganized enterprise within 3 working days, and provide it with feedback on credit repair results.

The tax authority can make full use of the application mechanism of tax-paying credit with banks and make relevant banks get access to the evaluation results after being authorized by the enterprises reorganized.

V. Optimization of Tax Write-off Procedures

The administrator shall, before applying to the market supervision and administration department for the deregistration of the enterprise, complete the procedures of tax write-off with the tax authority by presenting the written verdict of the people's court on the conclusion of bankruptcy proceedings. The tax authority shall issue tax clearance documents immediately, give tax write-off, and offset the "unrecoverable levies payable and payments with no hope of recovery" in accordance with relevant provisions.
The write-off window of tax service hall of the tax bureau of each district (region) shall be responsible for the business of enterprise bankruptcy liquidation, with the special window for acceptance, the specially-assigned person for management, and one window for all the affairs concerned.

VI. Provision of Tax Policy Support according to Law

Where an enterprise terminates its business activities after the court decides to rule on and accept the application for bankruptcy, it shall carry out the liquidation of enterprise income tax, and calculate the liquidation income and declare liquidation income tax by taking the entire liquidation period as an independent tax year. The administrator shall report the liquidation matters to the competent tax authority for filing in accordance with relevant provisions.

If the income from debt restructuring in the course of reorganization and reconciliation of bankrupt enterprises meets the conditions prescribed, special tax treatment may be applied.
Where the taxpayer entering the bankruptcy proceedings files an application for reduction or exemption of real estate tax or urban land use tax, the real estate tax shall be verified by the tax authority which shall put forward handling suggestions and submit to the municipal government for approval of reduction or exemption. The urban land use tax shall be approved by the tax authority of the district (region) in accordance with the law.

VII. Deadline for creditor's rights declaring

The administrator shall, after accepting the appointment of the people's court, notify Beijing Municipal Tax Service, State Taxation Administration in writing which shall receive and forward the circular of the declaration of tax creditors' right to the tax bureaus of each district (region) and the relevant agencies.

The tax authority shall, within 15 working days from the date of receiving the circular of creditor's rights declaring from the administrator, declare to the administrator the taxes owed by the enterprise, overdue fine and penalty. The interest arising from special tax adjustments shall also be declared together.

The tax authority shall, when declaring tax claims, specify the types of taxes (fees), tax rate (percentage charges), nature, and calculation basis of the declared claims.
In the case of mailing, the date of receipt and declaration shall be subject to the date of postmark.

VIII. This Announcement will come into force as of the date of promulgation.

The Announcement is hereby issued.

Beijing Municipal Tax Service,
State Taxation Administration
April 3, 2020