China alert - Issue 9, May 2012
Chinese tax authorities regard the Tax Investigation department as an important administrative department for the securing of State tax revenue. Since the 2008 Global Financial Crisis (GFC), the tax authorities have taken prominent steps to strengthen tax investigation. In particular, the tax development plan outlined in China's 12th Five-year Plan explicitly requires strengthening tax investigation and encouraging enhanced tax compliance. This spirit is reflected in the focus of tax investigations in 2012.
In 2011, China's Tax Investigation department focused on tax non-compliance cases, special tax inspections, regional special tax rectifications, inspections of key tax sources and criminal activities related to invoices. Publicly available data indicates that there was a total of 212,000 investigations and prosecutions, with RMB 92.35 billion in taxes, late payment surcharges and penalties recovered for the State treasury.