On January 27, 2024, the "Customs Law of the People's Republic of China (Draft") hereinafter referred to as the "Customs Law (Draft)" ended the public consultation for feedback. If there are no major changes in principle, it can be expected that in 2024, China will usher in the formal promulgation and implementation of the Customs Law and the abolition of the current Customs Regulations of the People's Republic of China (hereinafter referred to as the "Tariff Regulations"). The system of laws, regulations and normative enforcement documents related to the collection, exemption, refund, reduction and penalty of tariffs constructed with the Customs Law of the People's Republic of China (hereinafter referred to as the "Customs Law") as the superior law will face a comprehensive and systematic revision. The original self-contained tariff collection and management system will also be broken and gradually integrated with other taxes. Although the final text of the Customs Law has not yet been promulgated, the author believes that the changes brought by this legislative activity to the existing tariff collection and management system will be mainly reflected in the following aspects:
on 27 january 2024, the tariff law of the people’s republic of china (draft) (the tariff law (draft)”)ended its public consultation. subsequently, if there are no changes in principle, it can be expected that 2024 will usher in the formal promulgation and implementation of the tariff law in china, as well as the abolition of the current regulations of the people’s republic of china on import and export duties (“the tariff regulation”).the system of laws, regulations and normative documents related to the collection, exemption, refund, reduction and penalty of tariffs etc, constructed with the customs law of the people’s republic of china (“the customs law”) as the superior law, will be subject to a comprehensive and systemic revision. the original self-contained system of tariff collection and management will also be broken up and gradually harmonised with other tax categories. although the final text of the tariff law has not yet been issued, from the legislative ideas and body structure embodied in the tariff law (draft), it appears that the changes brought about by this legislative activity to the current tariff collection and management system will mainly be reflected in the following aspects.
1.The Customs will become a pure customs collection and administration agency, performing customs collection and administration functions in accordance with the authorization of the Customs Law.
china customs will become a pure enforcement agency for tariff collection and management, fulfilling its duties under the authorisation of the tariff law.
Since the implementation of the Customs Law on July 1, 1987, the Customs Law, the Customs Regulations with the Customs Law as the superior law, the Customs Administration of the Customs of the People's Republic of China on the Taxation of Imported and Exported Goods (hereinafter referred to as the "Customs Tax Administration Measures"), which also uses the Customs Law as the superior law, and the Customs Administrative Regulations of the People's Republic of China on Administrative Penalties (hereinafter referred to as the "Customs Administrative Punishment Regulations"), which also have the Customs Law as the superior law ) together form the basic legal framework of China's tariff collection and administration, and thus form a self-contained system of China's tariff collection and administration, which operates independently of other taxes and operates under the jurisdiction of the Customs Law. In the past, the customs had more say and initiative in the field of tariff collection and management, but in the future, the levy, exemption, refund, reduction and penalty related to tariffs will be operated under the regulation of the Tariff Law in accordance with the authorization of the Tariff Law or the Tariff Law.
since the implementation of the customs law on 1 july 1987, the customs law; the tariff regulation with the customs law as the superior law; the administrative measures of the people’s republic of china on levying of taxes by customs on imports and exports (“the measures for the administration of customs taxation”) with the customs law and tariff regulation as the superior laws; and the implementation regulations of customs administrative punishments of the people’s republic of china (“the customs administrative penalties regulations”),which also take the customs law as the superior law; constitute the fundamental legal framework for china’s tariff collection and management. this forms a self-contained tariff regulatory system in china, which is independent of other taxes and operates under the guidance of the customs law. previously, china customs had more voice and initiative in the field of tariff collection and administration, but in future, tariff-related collection, exemption, refunds, reductions, penalties, etc, will be operated in accordance with the tariff law or the authorisation of the tariff law.
2.The existing tariff system of "making up one" may be replaced by the "making up three" system.
the existing system of “one year’s back tariff” will be replaced by a system of “three years’ back tariff”.
Articles 44 to 47 of the Customs Law (Draft) rewrite Article 51 of the Customs Regulations, which are in line with the provisions of Article 52 of the Law of the People's Republic of China on the Administration of Tax Collection (hereinafter referred to as the "Law on the Administration of Tax Collection"). The period for the customs to confirm the tax payable in this article is three years from the date of payment of tax by the taxpayer or withholding agent or the release of the goods. Based on the author's understanding, according to the Customs Law and the Customs Regulations, the provisions that the Customs shall make up the tax within one year from the date of the taxpayer's payment of the tax or the release of the goods may be abolished, and the subsequent differences in the treatment of whether the tax is undercollected and evaded due to the taxpayer's violation will no longer be reflected in the period of back payment, but in whether to pursue punitive late fees and other punitive measures.
articles 44 to 47 of the tariff law (draft) rewrite the contents of article 51 of the tariff regulation to harmonise with the provisions of article 52 of the law of the people’s republic of china on the administration of tax collection (“the law on the administration of tax collection”).based on these articles, the period for customs to confirm the tariffs payable is three years from the date of payment of the tariff by the taxpayer or the withholding agent, or the date of release of the goods. accordingly, it appears that under the customs law and the tariff regulation, the provision that the customs authority will make up the short-levied and omitted tariffs not caused by the taxpayer’s violation of the law, within one year from the date of payment of the tariffs by the taxpayer or the release of goods by customs, shall be abolished. subsequently, the difference in the treatment of underpayment and omission of tariffs not caused by the taxpayer’s violation of the law and underpayments and omissions due to violations by the taxpayer, will no longer be reflected in the period of time for paying back the tariff, but in the imposition of punitive late payment fees and other measures.
3.Substantive identity penetration determination may be introduced into the tariff collection safeguard mechanism.
the substantive identity penetration identification may be introduced into the tariff collection safeguard mechanism.
The Customs Law (Draft) introduces the management concepts and measures of the Tax Collection and Administration Law in the section on "Administration of Customs Collection", which contains a provision that reads: "With the approval of the Commissioner of Customs directly under the Customs or the authorized Director of Customs, the Customs may notify the immigration administration agency in accordance with the law to take exit restriction measures against taxpayers, withholding agents, or their legal representatives or actual controllers who fail to fulfill their statutory obligations." This provision introduces the concept of actual controller while introducing exit restriction measures, and the substantive identity of the taxpayer will be determined through the substantive identity, which will greatly improve the shock effect on the actual controller of the company and improve the effectiveness of tariff collection.
the tariff law (draft) introduces many management concepts and measures from the law on administration of tax collection in the chapter “collection management of tariffs”. one article stipulates that “with the approval of the customs chief of the customs office directly under the general administration of customs or the customs chief of the subordinate customs office authorised by him, the customs authority may, in accordance with the law, notify the immigration authorities to take exit restrictive measures against taxpayers, withholding agents, or legal representatives or actual controllers of taxpayers, who h**e failed to comply with the legal obligations”. this measure introduces the concept of the actual controller, along with exit restrictive measures, and provides the substantive identity penetration of the taxpayer’s identity, which will greatly improve the deterrent effect on the actual controller of the company and enhance the effectiveness of tariff collection.
4.The Customs Act and the Customs Act may be the dual legal basis for the punishment of violations of the Customs Act.
the tariff law and the customs law may become a dual legal basis for punishing violations of the tariff law.
The Customs Law (Draft) improves the circumstances affecting the collection of taxes that are not included in the original Customs Law and the Regulations on the Implementation of Customs Administrative Penalties, and sets out the circumstances of violation of the Customs Law other than those specified in the Customs Law, which shall be punished by the Customs in accordance with the provisions of the Customs Law and other laws and administrative regulations. As a result, Customs will need to invoke the Customs Act and the Customs Act respectively in the future to impose penalties for violations of the Customs Act. Of course, the counterparts that can be punished by the customs will also be much broader than now.
the tariff act (draft) improves the circumstances affecting the collection of tariffs that were not included in the original customs law and customs administrative penalties regulation and establishes that violations of the tariff law, other than those listed, will be penalised by the customs authority on the basis of the customs law and other laws and administrative regulations. as a result, customs will need to separately invoke the tariff law and the customs law to punish violations of the tariff law. of course, the customs authority will be able to penalise a much wider range of subjects than at present.
The collection of customs duties is one of the four main functions of China Customs, and it is the duty of China Customs to ensure that all customs duties are collected. The continuous emergence of new forms of international business has put forward higher requirements for the supervision ability of China's customs, and China's constantly innovative customs clearance mode also requires customs to promote convenience while taking into account efficient supervision. In the future, the promulgation of the Customs Law will not only enhance the legislative level of tariff supervision, but also provide more powerful legal support for the tariff collection work of China Customs in terms of tariff collection mode, measures and management objects.
the collection of tariffs is one of the four main functions of china’s customs and ensuring that tariffs are collected to the fullest extent possible is the responsibility of customs. the continuous emergence of new forms of international trade has placed higher demands on the regulatory capacity of customs, and china’s constantly innovating customs clearance model also requires customs to promote trade facilitation while balancing efficient regulation. the promulgation of the tariff law in the future will not only raise the legal hierarchy of tariff regulation, but also provide stronger legal support for the tariff collection work of customs in terms of tariff collection models, measures and management objectives, etc.
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