Quote (kusotarre1 @ 22 Feb 2023 13:07)
Guess I don't know what you're describing. You say the govt finds a financial discrepancy, then fines you if you are unable to explain why it's not what they suspect it is (whatever violation in particular). They "need a structure?" Is this not being done through the courts?
Not really , I give you an example of one the situation that happen to my current client.
It was quite recent about three weeks back.
He had a factory in Hang Zhou about 13 to 15 years back which operated about a few months before he moved to Shenzhen.
The Hang Zhou IRS back check his accounts and said that he didn't pay some taxes back then and decided to fine him about 7.5 M RMB which he paid.
Then the Shenzhen IRS checked on him which they say he is supposed to pay the 7.5 M RMB fine to the Shenzhen IRS instead and ask him to get the 7.5 M back from the Hang zhou IRS which obviously they don't want to release it.
So now he have to pay double if not he is going to get fine even more.
The tax structure is by cities and not a federal kind of structure, therefore it is very very messy. It is done through courts yes, but different jurisdiction in different cities, there isn't a federal structure which is now confusing a lot of business owners.
And the tax office have never did such back checks until recently this year. So everyone is being caught off guard.
Even those who fervently follow the rules are now being picked on. It is somewhat a random thing, they will check on your yearly revenue and how huge the size of your factory or company is and they will pick on you.
This is the difficulties that they are facing now.
The central government do not have that much control on these issues, these are being delegated to local and province government and entities.