Measures for the Administration of the Treatment for Which Non-tax-residents are Eligible Under Tax Agreements (Trial Implementation)

(Issued by the State Administration of Taxation on August 24 2009 and effective as of October 1 2009.)

Guo Shui Fa [2009] No.124

Circular on the Issuance of the 《Measures for the Administration of the Treatment for Which Non-tax-residents are Eligible Under Tax Agreements (Trial Implementation)》

Offices of the State Administration of Taxation and local taxation bureaux of provinces, autonomous regions, municipalities directly under the central government and cities with independent development plans:

With a view to regulating and strengthening the administration of the treatment for which non-tax-residents are eligible under Tax Agreements, the State Administration of Taxation has formulated the Measures for the Administration of the Treatment for Which Non-tax-residents are Eligible Under Tax Agreements (Trial Implementation) that it hereby issues to you. You are asked to proceed accordingly.

Attachments (downloaded from the website of the State Administration of Taxation):

1. Record Filing Form for the Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement

2. Application for Approval of Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement

3. Form for Reporting Information on the Identity of a Non-tax-resident Wishing to Avail Itself of Treatment Under an Agreement (for Enterprises)

4. Form for Reporting Information on the Identity of a Non-tax-resident Wishing to Avail Himself/Herself of Treatment Under a Tax Agreement (for Individuals)

5. Form for Reporting on the Implementation of the Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement that Has Been Approved

6. Form Summarising Information on the Treatment Under Tax Agreements of Which Non-tax-residents Have Availed Themselves

Measures for the Administration of the Treatment for Which Non-tax-residents are Eligible Under Tax Agreements (Trial Implementation)

Part One: General provisions

Article 1: These Measures have been formulated pursuant to relevant provisions of the PRC Individual Income Tax Law and its implementing regulations, the PRC Enterprise Income Tax Law and its implementing regulations, the PRC Law on the Administration of the Levy and Collection of Taxes (the Law) and its implementing rules (hereinafter collectively referred to as the Domestic Tax Provisions) and the agreements for the avoidance of double taxation executed by the government of the People's Republic of China with foreign governments and regions (including the tax arrangements entered into with the Hong Kong and Macao Special Administrative Regions, hereinafter collectively referred to as Tax Agreements) in order to regulate and strengthen the administration of the treatment for which non-tax-residents are eligible under Tax Agreements.

Article 2: These Measures shall apply to non-tax-residents with tax obligations in China that wish to avail themselves of the treatment under Tax Agreements, other than the treatment specified in articles on international traffic of Tax Agreements.

For the purposes of these Measures, the phrase “treatment under Tax Agreements” means, pursuant to Tax Agreements, the reduction of or exemption from tax obligations performable in accordance with the Domestic Tax Provisions.

Article 3: Non-tax-residents wishing to avail themselves of treatment under Tax Agreements shall carry out examination and approval procedures or record filing procedures in accordance herewith. A non-tax-resident that has not carried out the examination and approval procedures or record filing procedures shall not be eligible for the relevant treatment under the Tax Agreement.

Article 4: Tax authorities shall provide high quality and efficient service to taxpayers and answer by telephone, in person, online, by letter, etc. in a timely manner tax queries concerning the treatment for which non-tax-residents are eligible under Tax Agreements.

Article 5: For the purposes of these Measures, the term “non-tax-resident” means a taxpayer that, pursuant to relevant Domestic Tax Provisions or Tax Agreement, is not a China tax-paying resident (and covers both non-tax-resident enterprises and non-tax-resident individuals).

Article 6: For the purposes of these Measures, the term “competent tax authority” means the office of the State Administration of Taxation or the local taxation bureau that, in respect of the tax obligations in China of non-tax-residents, has duties on tax levy administration in accordance with tax laws.

Part Two: Application for examination and approval, and for record filing

Article 7: A non-tax-resident wishing to avail itself/himself/herself of the treatment under a Tax Agreement specified in the following Tax Agreement articles shall submit an application for examination and approval of eligibility for treatment under a Tax Agreement to the competent tax authority or the tax authority with authority for examination and approval:

(1) the article on dividends of a Tax Agreement;

(2) the article on interest of a Tax Agreement;

(3) the article on royalties of a Tax Agreement; and/or

(4) the article on capital gains of a Tax Agreement.

Article 8: The tax authorities with the authority for examination and approval specified herein shall be published in a timely manner after their determination by the tax authority of the province, autonomous region, municipality directly under the central government or city with independent development plans (the Provincial-level Tax Authority) based on the organisational arrangements, staffing, workload and other such specific circumstances in its jurisdiction, and reported to the State Administration of Taxation for the record.

Article 9: When an application for examination and approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement is made in accordance with Article 7 hereof, the taxpayer shall fill out and submit the following documentation:

(1) an Application for Approval of Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement (see Attachment 2);

(2) a Form for Reporting Information on the Identity of a Non-tax-resident Wishing to Avail Itself/Himself/Herself of Treatment Under a Tax Agreement (for an enterprise or individual; see Attachment 3 and Attachment 4);

(3) proof of the identity of the tax-paying resident issued after the commencement of the preceding calendar year by the competent authority of the other contracting party to the Tax Agreement;

(4) proof of title to the property rights on the basis of which the relevant income is derived, such as the title document, contract, agreement and payment receipt, or relevant proof issued by an intermediary firm or notary office; and

(5) other documentation relating to the eligibility for treatment under a Tax Agreement that the tax authority requests be provided.

When submitting documentation pursuant to the preceding paragraph, the non-tax-resident may be exempted from submitting documentation that it has previously submitted to the competent tax authority, provided that it reports the title of the receiving competent tax authority and the date of receipt.

Article 10: Where, in respect of one item of income, a non-tax-resident wishes to avail itself/himself/herself more than once of the same treatment under a Tax Agreement that requires the submission of an application for examination and approval, it/he/she may be exempted from submitting to the same competent tax authority repetitive applications for examination and approval in respect of the same item of income for three calendar years after approval is first granted for eligibility for treatment under the Tax Agreement (including the calendar year concerned).

The term “same item of income” specified in the preceding paragraph means any of the following items of income:

(1) dividends derived from one equity investment held in an enterprise;

(2) interest derived from one claim held against a debtor; or

(3) royalties derived from the licensing of one right to a person.

For the purposes of the first paragraph of this Article, the term “same treatment under a Tax Agreement” means the treatment under a Tax Agreement specified in one article of the Tax Agreement, and excludes treatment under identical articles of different Tax Agreements and under different articles of the same Tax Agreement.

Article 11: If a non-tax-resident wishes to avail itself/himself/herself of the treatment under a Tax Agreement specified in the following Tax Agreement articles, the taxpayer or withholding agent shall carry out record filing procedures with the competent tax authority before the tax obligation arises or when reporting the relevant tax obligation:

(1) articles on permanent establishment and business profits of a Tax Agreement;

(2) the article on independent personal services of a Tax Agreement;

(3) the article on dependent personal services of a Tax Agreement; or

(4) articles of a Tax Agreement other than those specified in Items (1) to (3) of this Article and the Tax Agreement articles specified in Article 7 hereof.

Article 12: When carrying out record filing procedures in accordance with Article 11 hereof, a taxpayer shall fill out and submit the following documentation:

(1) a Record Filing Form for the Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement (see Attachment 1);

(2) proof of the identity of the tax-paying resident issued after the commencement of the preceding calendar year by the competent authority of the other contracting party to the Tax Agreement; and

(3) other documentation relating to the eligibility for treatment under the Tax Agreement required by the tax authority.

When submitting documentation pursuant to the preceding paragraph, the taxpayer or withholding agent may no longer need to fill out and submit again the Report Form for Eligibility for Treatment Under Tax Agreements in Respect of the Contracting of Projects and the Provision of Services by Non-tax-resident Enterprises specified in Item (4) of the first paragraph of Article 13 of the Tentative Measures for the Administration of Taxes on the Contracting of Projects and the Provision of Services by Non-tax-residents (Order of the State Administration of Taxation No.19) and other documentation that it has previously provided to the competent tax authority.

Article 13: If a tax obligation of a non-tax-resident is subject to withholding at source in accordance with the Domestic Tax Provisions, the taxpayer shall, at the time of carrying out the record filing procedures in accordance with Article 11 hereof, submit to the withholding agent the documentation that is required to be filled out and submitted in accordance with Article 12 hereof, which the withholding agent shall submit for record filing to the competent tax authority as supplementary documentation to the withholding report.

Part Three: Examination, approval and implementation

Article 14: After a tax authority receives an application for examination and approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement, it shall, depending on the circumstances, handle the same as follows:

(1) if the competent tax authority is not the tax authority with authority for examination and approval but has received an application for examination and approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement, it shall, in accordance with the provisions of the tax authority with authority for examination and approval, submit the application directly or through the hierarchy to the tax authority with authority for examination and approval;

(2) the tax authority with authority for examination and approval may require or entrust the lower-level tax authority to investigate and check the relevant circumstances;

(3) with respect to an application for examination and approval the acceptance of which is refused in accordance with Article 15 hereof, the tax authority with authority for examination and approval shall notify the applicant in writing of its decision not to accept the application and the reason therefor in a timely manner; and

(4) if the application for examination and approval and the relevant documentation provided contain inaccuracies, are incomplete or otherwise fail to satisfy approval requirements, the tax authority with authority for examination and approval shall inform the applicant and permit it/him/her to correct or supplement the same.

Article 15: The tax authority with authority for examination and approval may refuse to accept an application for examination and approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement if:

(1) the income item does not give rise to a tax obligation in accordance with the Domestic Tax Provisions;

(2) the treatment under a Tax Agreement for which the eligibility is applied falls outside the scope requiring examination and approval as specified in Article 7 hereof;

(3) the date of submission of the application for examination and approval exceeds the time limit during which eligibility for treatment under a Tax Agreement can retroactively be applied for in accordance with Articles 21 or 28 hereof;

(4) documentation relating to the eligibility for treatment under the Tax Agreement is not provided in accordance herewith or the documentation provided does not satisfy requirements and the applicant fails, without a legitimate reason, to supplement or correct the same within 90 days after the tax authority with authority for examination and approval gives notice to correct or supplement the same; or

(5) another circumstance under which acceptance ought to be refused exists.

Article 16: The tax authority with authority for examination and approval shall render its examination and approval decision (including a decision to refuse acceptance) and notify the applicant of the examination and approval results in writing by the times set forth below following the date of receipt by the tax authority with authority for examination and approval or the competent tax authority of the application for the eligibility of a non-tax-resident for treatment under a Tax Agreement; if it renders a decision to withhold granting eligibility for treatment under the Tax Agreement or, in accordance with Article 17 hereof, to temporarily deny eligibility for treatment under the Tax Agreement, it shall give the reason therefor:

(1) where the tax authority at the county or district level or below is responsible for examination and approval, 20 working days;

(2) where the prefectural or city-level tax authority is responsible for examination and approval, 30 working days; or

(3) where the Provincial-level Tax Authority is responsible for examination and approval, 40 working days;

If a decision cannot be rendered by the times set forth in the preceding paragraph, the same may be extended by 10 working days subject to the approval of the person in charge of the tax authority with authority for examination and approval, and the applicant shall be informed of the reason for the delay.

If the tax authority with authority for examination and approval fails to notify the applicant in writing of the examination and approval results by the times specified in the preceding two paragraphs, it shall be deemed to have granted approval for the eligibility of the non-tax-resident for treatment under the Tax Agreement.

Article 17: If the tax authority with authority for examination and approval, when reviewing an application for examination and approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement, discovers that it is unable to accurately determine whether the non-tax-resident is eligible for treatment under the Tax Agreement, it shall notify the applicant in writing that the relevant treatment under the Tax Agreement may not be implemented for the time being and give the reason therefor, and shall report the relevant circumstances to the higher-level tax authorities. If the mutual agreement or information exchange procedure needs to be initiated, the appropriate procedure shall additionally be initiated in accordance with relevant provisions.

The tax authorities at each level that deal with the forwarded information specified in the preceding paragraph shall render their handling decisions by the time specified in Article 16 hereof and notify the tax authority with authority for examination and approval in writing thereof either directly or through the hierarchy; or shall complete the further forwarding procedure up the hierarchy as far as the State Administration of Taxation.

Article 18: After approval as to eligibility for the treatment under a Tax Agreement is obtained, the taxpayer or withholding agent may proceed in accordance with the approval decision when filing tax returns, but shall fill out a Form for Reporting on the Implementation of the Treatment for Which a Non-tax-resident is Eligible Under a Tax Agreement that Has Been Approved (see Attachment 5) to report details of actual implementation to the competent tax authority.

Part Four: Follow-up administration

Article 19: If a non-tax-resident has completed the record filing or examination and approval procedure in accordance with Parts Two and Three hereof and is actually availing itself/himself/herself of the treatment under the Tax Agreement, the taxpayer, withholding agent and tax authority shall, in accordance with this Part, continue to duly carry out the follow up administration work associated with the eligibility of non-tax-residents for treatment under Tax Agreements.

Article 20: If there is a change in the particulars reported by the taxpayer or withholding agent in accordance herewith, matters shall, depending on the circumstances set forth below, be handled as follows:

(1) if the particular that has changed does not affect the continued eligibility of the non-tax-resident for the relevant treatment under the Tax Agreement, it/he/she may continue to avail itself/himself/herself of, or implement the relevant treatment under, the Tax Agreement;

(2) if the particular that has changed results in a change in the relevant treatment under the Tax Agreement for which the non-tax-resident is eligible, the record filing or examination and approval procedures shall be carried out anew in accordance herewith; or

(3) if the particular that has changed causes the non-tax-resident to no longer be eligible for the relevant treatment under the Tax Agreement, it/he/she shall cease to avail itself/himself/herself of or implement the relevant treatment under the Tax Agreement from the date on which the change occurred and tax returns shall be filed or withholding obligations performed in accordance with the Domestic Tax Provisions.

Article 21: If a non-tax-resident with tax obligations in China is eligible for treatment under a Tax Agreement but has not availed itself/himself/herself thereof and has overpaid taxes as a result of not availing itself/himself/herself of the treatment under the Tax Agreement for which it/he/she is eligible, it/he/she may, within three years from the date on which it/he/she settled and paid the overpaid taxes, retroactively apply to the competent tax authority to avail itself/himself/herself of the treatment under the Tax Agreement. Once it/he/she has carried out the record filing or examination approval procedures in accordance herewith and has become eligible for treatment under the Tax Agreement following approval by the competent tax authority, the overpaid taxes shall be refunded. The competent tax authority will not accept an application submitted after the aforementioned time limit.

If the refunded taxes obtained in accordance with the preceding paragraph are taxes refunded because of eligibility for a tax exemption or reduction as specified in the second paragraph of Article 78 of the implementing rules for the Law, interest shall not be refunded.

Article 22: A taxpayer or withholding agent that has availed itself/himself/herself of, or implemented, the relevant treatment under the Tax Agreement shall obtain and retain for not less than 10 years the vouchers and documentation relating to the treatment for which the non-tax-resident is eligible under the Tax Agreement.

Article 23: Competent tax authorities shall collect and keep information on the examination and approval, record filing and implementation of treatment for which non-tax-residents are eligible under Tax Agreements, ensure that relevant data are complete and accurate and establish an information sharing and interactive dynamic administration and monitoring mechanism for international tax administration procedures such as anti-tax evasion investigations, tax information exchanges, tax inspections and mutual agreements.

Tax authorities at every level shall duly collate information and keep statistics on the treatment under Tax Agreements that non-tax-residents within their jurisdictions have availed themselves of and fill out and submit to the higher-level tax authorities a Form Summarising Information on the Treatment Under Tax Agreements of Which Non-tax-residents Have Availed Themselves (see Attachment 6) on an annual basis.

Article 24: A tax authority shall, at regular or irregular intervals each year based on the risks presented by the implementation of Tax Agreements at levy administration or monitoring stages such as tax review and assessment, tax payment inspection and law enforcement inspection, randomly select a certain number of samples from the treatment under Tax Agreements of which non-tax-residents have availed themselves (including both those that were subject to record filing and those subject to examination and approval) and review, check or re-examine the same. The subject of such reviews, checks and re-examinations are set forth below:

(1) whether the non-tax-residents satisfy the conditions for eligibility for treatment under the Tax Agreements and whether they have used means such as concealing relevant information or providing false materials to fraudulently secure treatment under Tax Agreements;

(2) where the conditions for the eligibility of non-tax-residents for treatment under tax Agreements have changed, whether correct tax treatment has been carried out in accordance with provisions;

(3) whether non-tax-residents have availed themselves of treatment under Tax Agreements without the examination and approval of or record filing with the tax authority;

(4) whether the tax authority with authority for examination and approval has correctly performed its examination and approval duties specified herein and whether its examination and approval decisions are appropriate; and

(5) whether other instances of incorrect implementation of provisions hereof exist.

Article 25: If, in reviewing the treatment under a Tax Agreement of which a non-tax-resident has availed itself/himself/herself, the competent tax authority discovers that the party with responsibility for reporting failed to, or did not fully perform, the reporting obligation specified herein, or if the tax authority requires the party with responsibility for reporting to provide other documentation concerning the treatment for which the non-tax-resident is eligible under the Tax Agreement supplementing that which it/he/she has already provided, the tax authority may require the party with responsibility for reporting to provide relevant documentation within a specified period of time.

The parties with responsibility for reporting specified herein include taxpayers, withholding agents and other relevant responsible parties that, in accordance with relevant provisions, are required to report information or provide documentation to tax authorities.

Article 26: When handling the work associated with the treatment for which non-tax-residents are eligible under Tax Agreements, tax authorities shall support and assist each other (including support and assistance between the office of the State Administration of Taxation and the local taxation bureau and that between tax authorities in different regions) and endeavour to realise information sharing.

Where management of information on the treatment for which a non-tax-resident is eligible under a Tax Agreement involves more than one competent tax authority or tax authority with authority for examination and approval, a tax authority may request that the other relevant tax authority or authorities assist it in checking and verifying information. A tax authority that has received such a request shall give a reply on its handling of matters within 20 days from the date on which it received the request to assist in checking and verifying.

Where the handling of one treatment for which a non-tax-resident is eligible under a Tax Agreement involves different competent tax authorities or tax authorities with the authority for examination and approval, they shall endeavour to reach a consensus through consultations. If they fail to reach a consensus through consultations, they shall submit the same to their common higher-level tax authority for a ruling.

Article 27: If a competent tax authority discovers that a non-tax-resident has availed itself/himself/herself of treatment under a Tax Agreement but any of the following circumstances applies, it shall render a handling decision denying the non-tax-resident eligibility for treatment under the Tax Agreement:

(1) it/he/she failed to submit an application for examination and approval in accordance herewith or, although it/he/she submitted such application, the tax authority with authority for examination and approval has not rendered or is not deemed to have rendered a decision granting approval for eligibility of the non-tax-resident for treatment under the Tax Agreement, and failed to rectify the matter without a legitimate reason after the competent tax authority set a deadline for rectification;

(2) it/he/she failed to submit a record filing report and failed to rectify the matter without a legitimate reason after the competent tax authority set a deadline for rectification;

(3) it/he/she failed to provide relevant documentation in accordance herewith, and failed to rectify the matter without a legitimate reason after the competent tax authority set a deadline for rectification;

(4) it/he/she failed to provide, without a legitimate reason, relevant supplementary documentation by the deadline set by the competent tax authority;

(5) it/he/she ought to have ceased availing itself/himself/herself of the treatment under the Tax Agreement due to a change in circumstances but failed to immediately cease availing itself/himself/herself of the relevant treatment under the Tax Agreement in accordance with Item (3) of Article 20 hereof; or

(6) another circumstance under which treatment under the Tax Agreement should not be enjoyed is found through investigation and verification.

Article 28: A non-tax-resident to whom any of the circumstances set forth in items (1) to (4) of Article 27 hereof apply may, within three years from the date of settling and paying back taxes, submit an application to the competent tax authority to retroactively avail itself/himself/herself of treatment under the Tax Agreement and rectify its/his/her violation of these Measures as required by the competent tax authority. If, following verification by the tax authority, it is determined that it/he/she is indeed eligible for the relevant treatment under the Tax Agreement and such treatment is accorded retroactively, the back taxes paid shall be refunded; however, the relevant late payment penalty, fines and interest shall not be refunded.

Article 29: If a taxpayer requests mutual agreement with the competent tax authority, matters shall be handled in accordance with the article on the mutual agreement procedure and other relevant articles of the Tax Agreement, in which case application of the time limits specified in Articles 21 and 28 hereof may be exempted.

Article 30: If, in examining the information on the treatment under a Tax Agreement of which a non-tax-resident has availed itself/himself/herself or an application for retroactive eligibility for treatment under a Tax Agreement, the competent tax authority discovers that it is unable to accurately determine whether the non-tax-resident is eligible for the relevant treatment under the Tax Agreement, it shall report the relevant circumstances to the higher-level tax authority. If the mutual agreement or information exchange procedure needs to be initiated, the appropriate procedure shall additionally be initiated in accordance with relevant provisions. If it decides not to refund the taxes for the time being or requires the taxpayer or the withholding agent not to avail itself/himself/herself of or implement the treatment under the Tax Agreement for the time being or to provide security for taxes in accordance with relevant provisions, it shall notify the taxpayer or the withholding agent in writing of its handling decision and the reason therefor.

Article 31: Tax authorities at every level shall include the administration work carried out in connection with the treatment for which non-tax-residents are eligible under Tax Agreements as part of the system for the assessment of the job responsibility system and shall supplement and improve the following in accordance with the rules and regulations for the pursuit of liability in connection with tax-related administrative law enforcement:

(1) establishment and enhancement of a tracking and feedback system: a tax authority shall regularly or in an ad hoc fashion track and give feedback on the work associated with the examination and approval or record filing of the treatment for which non-tax-residents are eligible under Tax Agreements and enhance the work mechanism as appropriate;

(2) establishment of a file evaluation and review system: tax authorities at every level shall open and improve files reflecting the procedures relating to the treatment for which non-tax-residents are eligible under Tax Agreements and the results thereof, duly keep various types of documentation on file and higher-level tax authorities shall regularly evaluate and review the documentation kept on file;

(3) establishment of a hierarchical monitoring system: higher-level tax authorities shall establish a permanent monitoring system, strengthen their monitoring of the implementation of Tax Agreements by lower-level tax authorities and continuously improve the accuracy of the implementation of Tax Agreements.

Part Five: Legal liability

Article 32: If a competent tax authority discovers that any of the following circumstances applies to the treatment under a Tax Agreement of which a non-tax-resident has availed itself/himself/herself, it shall handle matters in accordance with Article 62 of the Law:

(1) an application for examination and approval was not submitted in accordance herewith, or, although such an application was submitted, the tax authority with authority for examination and approval has not rendered or is not deemed to have rendered a decision granting approval for eligibility of the non-tax-resident for treatment under the Tax Agreement;

(2) a record filing report was not submitted in accordance herewith; or

(3) relevant documentation was not provided in accordance herewith or as required by the competent tax authority.

Article 33: If the documentation that a party with a responsibility for reporting is required to fill out and submit or is required to submit in accordance herewith is identical to that previously filled out and submitted or that which has been submitted to the same competent tax authority, the party with the responsibility for reporting may be exempted from filling out and submitting or exempted from submitting the same relevant documentation.

Article 34: When implementing Article 27 hereof, the competent tax authority shall, depending on the circumstances set forth below, deal with the taxpayer or withholding agent as follows:

(1) if, in accordance with the Domestic Tax Provisions, the taxpayer is required to file tax returns itself/himself/herself, back taxes shall be levied on the taxpayer and a late payment penalty shall be imposed in accordance with relevant provisions of the Law; if the taxpayer has forged, altered, concealed or destroyed without authorisation account books and/or accounting vouchers or has over-recorded expenditures or not recorded or under-recorded revenues in its account books, or is notified by the tax authority to file a tax return but refuses to do so or files a fraudulent tax return, constituting illegitimate enjoyment of treatment under a Tax Agreement and non-payment or underpayment of taxes payable, penalties shall be imposed in accordance with the first paragraph of Article 63 of the Law; or

(2) if, in accordance with the Domestic Tax Provisions, the taxpayer is subject to withholding at source, back taxes shall be levied against the taxpayer in accordance with relevant provisions of the Law; and the withholding agent shall be dealt with in accordance with Article 69 of the Law.

Article 35: A tax authority shall handle matters relating to the eligibility of a non-tax-resident for treatment under a Tax Agreement in accordance herewith in a timely manner. If an error in handling attributable to the tax authority arises, liability shall be pursued in accordance with the relevant provisions of the Law and the tax law enforcement responsibility system.

The following periods of time shall not be counted as part of the working time expended by a tax authority in handling relevant matters in accordance herewith:

(1) the time for a taxpayer or withholding agent to provide supplementary documentation as required; and

(2) the time required for information exchange or mutual agreement with the competent authorities of the other contracting party of a Tax Agreement.

Article 36: The examination carried out for the approval of the eligibility of a non-tax-resident for treatment under a Tax Agreement is an examination of the consistency between the documentation submitted by the taxpayer or withholding agent and the conditions specified in the Tax Agreement, and does not modify the taxpayer's or withholding agent's responsibility for filing true returns.

Article 37: Where a tax authority with authority for examination and approval renders a decision granting approval for eligibility of a non-tax-resident for treatment under a Tax Agreement based on fraudulent information and documentation provided by the taxpayer or withholding agent, the tax authority with authority for examination and approval or the higher-level tax authority shall have the authority, following verification, to revoke the original examination and approval decision and, depending on the circumstances set forth below, to handle the matter as follows:

(1) if the taxpayer or withholding agent has not implemented the original examination and approval decision, but the non-tax-resident still wishes to avail itself/himself/herself of the relevant treatment under the Tax Agreement, it/he/she may be required to carry out the examination and approval procedures again;

(2) if the taxpayer or withholding agent has implemented the original examination and approval decision, but, based on the verification, determination of whether the non-tax-resident is ineligible for the relevant treatment under the Tax Agreement is not possible, matters shall be handled in accordance with Article 32 hereof and an order shall be given to carry out the examination and approval procedures again within a specified period of time; or

(3) if the taxpayer or withholding agent has implemented the original examination and approval decision, and, based on the verification, it can be determined that the non-tax-resident is ineligible for the relevant treatment under the Tax Agreement, matters shall be handled in accordance with Articles 27 and 34 hereof.

Article 38: If, due to improper examination and approval by the tax authority, a non-tax-resident that is ineligible for treatment under a Tax Agreement actually avails itself/himself/herself of such treatment, matters shall be handled in accordance with the first paragraph of Article 52 of the Law, unless the same arose due to the provision of false information and documentation by the taxpayer or withholding agent.

Article 39: If a violation of these Measures by a taxpayer or withholding agent is determined to be a violation of the Domestic Tax Provisions and liability therefor has been pursued in accordance with the Domestic Tax Provisions, no further pursuit of such liability shall be carried out in accordance with these Measures.

Article 40: If a taxpayer or withholding agent is dissatisfied with a handling decision as specified herein rendered by the competent tax authority or the tax authority with authority for examination and approval, it/he/she may, in accordance with relevant provisions, state the reason therefor, state its/his/her opinions, request a hearing or institute an administrative review procedure or suit.

Part Six: Supplementary provisions

Article 41: A non-tax-resident may appoint an agent to handle matters that it/he/she is required to carry out in accordance herewith. When an agent handles matters entrusted by a non-tax-resident, it shall present the written power of attorney from the non-tax-resident.

Article 42: A taxpayer or withholding agent may submit to the tax authority photocopies of the vouchers and proofs that it/he/she is required to submit in accordance herewith, but shall indicate the place where the original is kept, affix thereto the seal of the party with responsibility for reporting and submit the originals for verification as required by the tax authority.

Article 43: The documentation filled out and submitted, or that which is submitted in accordance herewith, shall be in Chinese. If the original of a relevant document is in a foreign language and the tax authority requests in accordance with relevant provisions that the same be translated into Chinese, the party with responsibility for reporting shall translate the same into Chinese as required by the tax authority.

Article 44: In the event of a discrepancy between these Measures and a Tax Agreement or an agreement on the implementation of the Tax Agreement reached between the State Administration of Taxation and the competent tax authority of the other contracting party through mutual agreement, matters shall be handled in accordance with the Tax Agreement or agreement.

Article 45: These Measures shall be effective as of October 1 2009. The State Administration of Taxation, Circular on the Amendments to the Application Form for Treatment for Which Foreign Residents Are Eligible Under Agreements for the Avoidance of Double Taxation (Guo Shui Han Fa [1995] No.089) shall be repealed simultaneously.

All tax obligations for which eligibility for treatment under Tax Agreements is required incurred on or after October 1 2009 shall be handled in accordance with these Measures. Tax obligations incurred before October 1 2009 but for which retroactive eligibility for treatment under Tax Agreements is required as of October 1 2009 shall also be handled in accordance with these Measures.