Homework 1-2

1. Read the after-school materials. Assuming you will join a TV show to

discuss about the change of new tax administration and tax collection
lawplease give me three key point about your speech.
The three key points will be on 1) Late Payment Interest, 2) Cancellation of
tax prepayment before Tax Administration Appeal, 3) Tax Administration on
online trading.
1) Late payment interest
In case of failure to file tax returns, the late payment surcharge at 0.5%
per day under the prevailing tax collection administration law (TCAL)
would be replaced by a late payment interest under the discussion
draft. The interest rate on such late payment would be the prevailing
market RMB loan rate. In addition, new provisions are added
concerning the suspension and exemption of interest. For example, if
the failure to settle tax payments is not the fault of the taxpayers, or if
the taxpayers proactively self-correct the non-compliance or assist the
tax authorities in the course of tax inspection, interest may be reduced
or waived.
This amendment implies that the late payment interest is in essence an
economic compensation instead of an administrative punishment. As
such, it is reasonable to lower the rate to the market loan rate.
However, it should be noted that a late payment surcharge at 5% per
day, increased from 0.5% per day in the prevailing TCAL, would still
apply in the situation where the taxpayer fails to comply with tax
bureaus tax collection decision.
2) Cancellation of tax prepayment before Tax Administrative Appeal.
The discussion draft removes the requirement for the taxpayers to
prepay the taxes before applying for the tax administrative appeal. This
allows taxpayers to initiate tax administration appeal without paying
tax, which helps to protect taxpayers lawful right. However, tax
prepayment is still required if taxpayer brings the case up to the court.
Although it lowers the barrier to apply for tax administrative appeal, it
appears that there is still room to improve the independence of the tax

administrative appeal institution in China to secure the transparency

and fairness of the administrative appeal mechanism.
3) Tax administration on online trading.
Currently, there are no specific provisions in relevant laws and
regulations on whether taxes shall be imposed on online trading.
To cope with the rapid development of online business, the Draft Law
sets out certain provisions on online trading:
A taxpayer engaging in online trading should disclose the
information on its tax registration certificate or a hyperlink
to its tax registration certificate in a conspicuous position
on its website.
Online trading platform operators should provide tax
authorities with registration information of ecommerce
traders.
When determining tax amounts or performing tax audits,
tax authorities are empowered to inspect the online
trading status of organizations providing the online
trading platform as well as inspecting related payment
status at online payment service providers.
The upcoming new Law would likely become the first law specifying
the tax liability of online traders. The Draft Law only sets out general
principles and basic framework related to the online trading; detailed
provisions would be expected to be stipulated in the upcoming
amendments to the Implementation Rules of the Law, VAT Law and
CT Regulations. Certainly the obligations imposed on platform
companies or payment service providers would create a source of
information to tax authorities and could help to detect revenue lost in
the internet world.

2. Please give me a flowchart to show the procedure of tax administration laws.

3. Please search by Wikipediaft.com/lexiconInvestopediaand find the

definition of tax avoidance, tax evasion, tax compliance.
Tax Avoidance:
Wikipedia: Tax avoidance is the legal usage of the tax regime to one's own
advantage to reduce the amount of tax that is payable by means that are
within the law.
Ft.com/lexicon: Tax avoidance is using the tax law to obtain a tax advantage
that the government never intended. It frequently involves contrived, artificial
transactions that serve no purpose other than to reduce tax liability.
Investopedia:
The use of legal methods to modify an individual's financial situation in order
to lower the amount of income tax owed. This is generally accomplished by
claiming the permissible deductions and credits. This practice differs from tax
evasion, which is illegal.
Tax Evasion:
Wikipedia: Tax evasion is the illegal evasion of taxes by individuals,
corporations and trusts. Tax evasion often entails taxpayers deliberately
misrepresenting the true state of their affairs to the tax authorities to reduce
their tax liability and includes dishonest tax reporting, such as declaring less
income, profits or gains than the amounts actually earned, or overstating
deductions.
Ft.com/lexicon: Using illegal methods in an attempt to avoid paying tax.
Investopedia: An illegal practice where a person, organization or corporation
intentionally avoids paying his/her/its true tax liability. Those caught evading
taxes are generally subject to criminal charges and substantial penalties.
Tax Compliance:
Wikipedia: Nil
Ft.com/lexicon: Nil
Investopedia: Nil