Establishing the tax credit rating system

The STA has established a modern tax credit rating system by promulgating the Administrative Measures on Tax Credit Rating (Provisional) and the Tax Credit Rating Indices and Methods (Provisional). In 2019, 25.69 million qualified taxpayers were assessed on their tax compliance for the year of 2018, among which 1.256 million were rated A-level and 1.802 million D-level, accounting for 4.89% and 7.01% of the total respectively.

Emphasis has been placed on the application of tax credit rating results. By entitling A-level taxpayers to more favorable treatments and subjecting D-level taxpayers to stricter scrutiny in a wide range of tax-related matters such as application for invoice issuance and VAT refunds on exported goods, the STA has effectively lowered compliance costs and improved overall compliance. Since 2015, the STA has sought cooperation with the China Banking and Insurance Regulatory Commission (CBIRC) in "Bank-Tax Cooperation" and since November 2019, its scope of beneficiaries has been expanded from A level and B level enterprises to M level enterprises. It has benefited a number of newly established businesses and helped alleviate financing difficulties for small and micro businesses.

The STA is also an active participant in the construction of social credit system and the exploration of cooperation on credit sharing. The STA has signed a Cooperation Framework on Credit Sharing and Application with the State Development and Reform Commission and 53 Memoranda of Joint Actions on Rewarding Honesty and Punishing Dishonesty with related government departments to further develop mechanisms in credit sharing, mutual rating recognition and cooperation in reward and punishment with respect to credit rating results.