All local taxation bureaus and sub-bureaus in districts and counties, and business offices of Beijing Local Taxation Bureau,

　　We now distribute to you the “ Detailed Implementation Methods of Beijing Local Taxation Bureau for the Administration of Tax in Arrears ” (hereinafter referred to as the “ Implementation Methods ”), and put forward the following requirements combining with the actual work. Please do your work in accordance with the “ Implementation Methods ” and the requirements.

　　1 Each unit shall do a good job in the popularization and training of the “ Implementation Methods ” and carry it out combining with the actual situation of the bureau.

　　2 The Collection and Administration Departments of each bureau shall actively coordinate with related business departments to study and carry out the “ Implementation Methods ”, define the work responsibilities and arrange the working process.

　　3 The tax in arrears and the late fee during the period from July 1, 2003 to December 31, 2003 shall be registered and counted by each bureau in accordance with the “ Implementation Methods ”. Any problems arising during the trial shall be reported in time to Beijing Local Taxation Bureau.

　　4 The documents applied to the “ Implementation Methods ” shall be made and distributed by Beijing Local Taxation Bureau in a unified manner.

　　5 For the tax in arrears and the late fee before June 30, 2003 , Beijing Local Taxation Bureau will arrange at some other time.

　　Appendix: 1. Notice on Pursuing the Payment of Tax in Arrears (Late Fee)

　　2. Basic Information Report of Defaulters of Tax

　　3. Methods for the Announcement of Tax in Arrears

October 17, 2003

　　Detailed Implementation Methods of Beijing Local Taxation Bureau for the Administration of Tax in Arrears

Chapter 1 General Provisions

　　Article 1 This Method is formulated, in accordance with 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”) and the “Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection” (hereinafter referred to as “Rules for Implementation”) and combined with the characteristics of the administration of local tax collection in Beijing, to strengthen the administration of tax collection, strictly supervise and effectively settle the payment of tax in arrears.

　　Article 2 The tax that is unpaid or underpaid (hereinafter referred to as the “tax in arrears”) refers to the amount of tax that a taxpayer or a withholding agent fails to pay or remit according to the laws and administrative regulations, or within the time limit prescribed by tax authorities according to laws and administrative regulations, and the guaranteed amount of tax that a tax payment guarantor fails to pay within the prescribed time limit. The following acts shall be treated as tax in arrears:

　　(1) The tax declaration is made, but the taxpayer or the withholding agent fails to pay or remit the tax payable within the prescribed time limit;

　　(2) A taxpayer or withholding agent is permitted to defer the payment of tax, but fails to pay the amount of tax payable upon the expiration of the permitted period;

　　(3) The amount of tax fails to be turned over to the State Treasury within the time limit prescribed in the “Decision on Taxation handling” after the verdict of tax inspection;

　　(4)A taxpayer or a withholding agent adopts the tax payment “on a fixed quota and regular basis”, but fails to pay the amount of the tax payable upon the expiration of the period;

　　(5)A tax payment guarantor fails to pay the guaranteed amount of tax within the prescribed time limit after providing a guaranty for tax payment;

　　(6)Other amount of tax that is not paid or remitted within the prescribed time limit.

　　Article 3 The taxpayers, withholding agents and tax payment guarantors under the above-mentioned circumstances are the Defaulters of Tax in this Method.

　　Article 4 The tax in arrears in this Method shall include the late fee surcharged for the tax that is unpaid or underpaid.

　　Article 5 The principles of the administration of tax in arrears:

　　To execute the rights according to law and ensure the financial revenue; to promote the development of tax source and safeguard the social stability; to perfect the interior systems and standardize the administration of tax collection.

　　Chapter 2 Registration of Tax in Arrears

　　Article 6 The competent tax offices shall register the amount of tax that the defaulters of tax fail to pay and establish the Registration Master-file of Tax in Arrears , which shall cover three aspects: the basic information of defaulters of tax, financial status and the implementation of the related measures adopted by the tax authorities during the administration of tax in arrears.

　　Article 7 The competent tax offices shall send the “ Notification on Pursuing Tax in Arrears (Late Fee) ” and the “ Basic Information Report of Defaulters of Tax ” to the taxpayers, withholding agents and tax payment guarantors who fail to pay the amount of tax payable, meanwhile, the “ Receipt of Taxation Documents Delivery ” shall be made and the known information of the defaulters of tax shall be kept in the “ Registration Master-file of Tax in Arrears ” for records. The information related to the measures adopted during the administration of tax in arrears shall also be kept in time in the “ Registration Master-file of Tax in Arrears ” for records.

　　Chapter 3 Administration of Tax in Arrears

　　Article 8 The competent tax authorities shall fulfill the following responsibilities during the administration of tax in arrears.

　　(1)  Upon the approval of the Commissioners of the bureaus (sub-bureaus) at district or county level, to examine and verify, on the strength of a permit, which is of a nationally unified form, for the inspection of deposit accounts, the deposit account opened by the defaulter of tax with a people's bank or any other financial institutions and check it with what the defaulter of tax has declared.

　　(2) According to the last balance sheet and the related materials provided by the defaulter of tax, to investigate the change of the real estate and assets in large sum (the assets of a unit price over RMB ￥ 50,000 Yuan); To find out whether the defaulters of tax under settlement of property are associated enterprises; and check the transaction value. Where there are obvious signs that the defaulter of tax transfers property at an obviously low price, to send mails to confirm whether the transferee knows the particulars of transferor's tax in arrears.

　　(3) To get information on the merger and division of an enterprise and investigate whether the defaulter of tax makes report according to the provisions. Where a defaulter of tax reports its merger or division, the competent tax offices shall settle in time the payment of tax in arrears, and the amount of tax that are not paid off shall be handled in accordance with the provisions in Article 48 of the “ Law on the Administration of Tax Collection ”.

　　(4)  Where a defaulter of tax is found to guarantee tax payment with his own property, to know the date of guarantee through the contract signed by the defaulter of tax.

　　(5) To investigate the time limit of the accounts receivable, notes receivable and the investment profits of defaulters of tax, and investigate the acts of failure to execute the claim or waiver of the due claim for over half of a year following the expiration of the time limit.

　　Article 9 Should a defaulter of tax or its legal representative needs to leave China but still fails to settle his tax payable and the late fee, the competent tax authorities may order the defaulter of tax to provide a guaranty for tax payment.

　　Article 10 Where a tax payment guarantor provides a guaranty for the defaulter of tax or a defaulter of tax provides a guaranty with his own property, Article 61, 62 of the “ Rules for Implementation ” and the “ Proposed Methods of Beijing Local Taxation Bureau for the Implementation of Tax Payment Guaranty “shall apply.

　　Article 11 Where a defaulter of tax makes mortagage and pledge with his own property, and the mortgagee or pledgee desires to get some information about the tax in arrears, the tax authorities shall provide the needed information.

　　Article 12 The competent tax offices shall report to the appraisal team of tax payment credit standing rating the information on the tax in arrears of the taxpayers and withholding agents, so that the appraisal team may adjust their credit standing rating in accordance with the actual situation.

　　Article 13 The competent tax authorities may limit the amount of invoices sold to the defaulters of tax, or open invoices on behalf of them. The competent tax authorities shall resume the normal supplying of the invoice within 24 hours after the defaulter of tax has paid the tax in arrears.

　　Chapter 4 Announcement of Tax in Arrears

　　Article 14 The tax authorities at city and district level shall announce the tax in arrears of the defaulters of tax in accordance with law.

　　(1)  If a defaulter of tax settles the amount of tax payable on schedule, no announcement shall be made;

　　(2) If a defaulter of tax pays the amount of over 30% of the tax in arrears, and provides a guaranty in full amount or a payment plan for the balance of the tax in arrears, the announcement shall be postponed for the time being;

　　(3) If a defaulter of tax pays parts of the tax in arrears, but fails to provide a guaranty in full amount or a payment plan for the balance of tax in arrears, the amount of tax without a guaranty or a payment plan shall be announced;

　　(4)  Except the above-mentioned three circumstances, all of the tax in arrears of the defaulters of tax shall be announced.

Article 16 An announcement of tax in arrears may be issued on schedule at the taxation handling sites of the tax authorities, on the propagandistic columns and taxation bulletin set up in public places by the tax authorities, or on the media, such as radios, televisions, newspaper, periodicals and networks.

　　Chapter 5 Pursuing of Tax in Arrears

　　Article 17 Where a defaulter of tax fails to pay off the amount of tax in arrears within one month after the announcement of tax in arrears is made, the competent tax authorities may, in accordance with the relevant provisions in the “ Law on the Administration of Tax Collection ” and “ Rules for Implementation ”, “ Proposed Methods of Beijing Tax Authorities for Investigating, Freezing and Withholding Deposits of Defaulters of Tax ”, and “ Implementation Methods of Beijing Local Taxation Bureau for Distraining and Sealing up Property ”, adopt tax preservative measures or compulsory enforcement measures.

　　Where the competent authorities discover that there are obvious signs that the defaulter of tax has transferred or concealed its taxable commodities, goods or other properties, or taxable income after the expiration of the time limit within which the competent authorities order the same to pay off the amount of tax in arrears, the competent tax authorities may adopt corresponding tax preservative measures or compulsory enforcement measures and shall not be limited by the time limit prescribed in the proceeding paragraph.

　　Article 18 Corresponding tax preservative measures or compulsory enforcement measures shall be adopted upon the approval of the commissioners of the bureaus (sub-bureaus) at district or county level by the Administration and Collection Departments and Inspection Departments.

　　Article 19 The houses and articles of use for the basic human use of the defaulters of tax and the relatives supported by the defaulters of tax, and other household goods of a unit price below RMB ￥ 5000 Yuan shall be out of the scope of the above-mentioned compulsory enforcement measures.

　　Article 20 The commodities, goods or other properties whose values exceed the amount of tax payable and that cannot be divided up may be distrained, sealed up or auctioned in whole only when the taxpayer, withholding agent or the tax payment guarantor has no other properties for compulsory enforcement measures.

　　Article 21 Where the proceeds from the auction or sale of the commodities, goods or properties of a defaulter of tax offset the amount of tax payable, late fee, fine and the expense for distraining, sealing up, auction and selling, the balance shall be returned within three days to the defaulter of tax subject to the execution.

　　Article 22 Should a defaulter of tax or its legal representative needs to leave China , the competent tax authority shall order the same to settle the tax payable and the late fee or provide a guaranty for tax payment. If the defaulter of tax or its legal representative neither settles the tax payable and late fee nor provides a guaranty for tax payment, the tax authorities shall notify the exit administrative authorities to prevent him leaving China.

　　Article 23 Where a defaulter of tax fails to execute the claim for over half a year without justifiable reasons, or a defaulter of tax waives the due claim and transfers his properties without charge or obviously at unreasonably low price, the competent tax authorities may, after investigation and evidence collection, apply to the court to execute the right of subrogation or right of revocation.

　　Article 24 Where a defaulter enterprise of tax is bankrupt or dissolved, the competent tax authorities shall apply to the agent for liquidation for the repayment of the tax in arrears and satisfaction of the priority of tax collection.

　　Chapter 6 Legal Liabilities

　　Article 25 Where a defaulter of tax fails to fill in the “Basic Information Report of Defaulters of Tax” on time; fails to fulfill the obligation of report prior to the merger, division, and settlement of big-sum property, or prior to the dissolution, withdraw and bankruptcy; fails to report the particulars truthfully or refuses to provide relevant materials, such case shall be handled in accordance with the provisions in Article 62 of the “ Law on the Administration of Tax Collection ”.

　　Article 26 Where a defaulter of tax transfers or conceals the properties, and obstruct the tax authorities from pursuing the amount of tax in arrears, such case shall be handled in accordance with the provisions in Article 65 of the “ Law on the Administration of Tax Collection ”. Where the above-mentioned acts results in the tax authorities' inability to pursue the tax in arrear and the amount in question exceeds RMB ￥ 10,000 Yuan, and where such act has constituted a crime, such defaulter of tax shall be transferred to the judicial organ for handling according to law.

　　Article 27 Where a defaulter of tax refuses to pay the tax payable with resort to violence or menace, the tax authorities shall pursue the amount of tax he refuses to pay and imposes a punishment thereon according to the provisions in Article 67 of the “ Law on the Administration of Tax Collection ”; Where such act has constituted a crime, such defaulter of tax shall be transferred to the judicial organ for handling according to law.

　　Article 28 Where a defaulter of tax has been ordered by the tax authorities to pay, within a fixed period of time, the amount of tax which should have been paid or remitted but has not been paid or underpaid within the prescribed time limit, still fails to pay the amount of tax upon the expiration of the period, the tax authorities may, in addition to adopting compulsory enforcement measures, handle such case in accordance with the provisions in Article 68 of the “ Law on the Administration of Tax Collection ”.

　　Article 29 Where a defaulter of tax avoids, refuses or obstructs by other means the inspection of the tax authorities, the competent tax authority shall order them to rectify within a fixed period of time and handle such case according to the provisions in Article 70 of the “ Law on the Administration of Tax Collection ”.

　　Article 30 Where a bank or other financial institution with which a defaulter of tax open an account refuses the legal inspection of the deposit account of the default of tax by the tax authorities, or refuses to enforce the decision made by the tax authorities to freeze the account or deduct the tax payable from the deposit of the defaulter of tax, or help the defaulter of tax to transfer the deposit after receiving the written notification from the tax authorities, thus causing losses to the tax revenue, such case shall be handled in accordance with the provisions in Article 73 of the “ Law on the Administration of Tax Collection ”.

　　Article 31 Where a tax deputy violates the tax collection laws and administrative regulations, thus causing the taxpayer or withholding agent fails to pay the tax payable, or underpays the tax payable, such case shall be handled in accordance with the provisions in Article 98 of the “ Rules for Implementation ”.

　　Article 32 Where a defaulter of tax makes bold to tear up the seal when the tax authorities are sealing up his properties, the defaulter of tax shall be transferred to the public security organ for handling according to law.

　　Chapter 7 Supplementary Provisions

　　Article 33 If the former provisions are incongruous with this Method, the provisions of this Method shall apply.

　　Article 34 This Method shall be explained by Beijing Local Taxation Bureau.

　　Article 35 If there are special laws and administrative regulations governing them, they shall follow such special laws and regulations.