Announcement of the Shanghai Municipal Tax Service of the State Taxation Administration on Issuing the Management Measures for Advance Tax Rulings of the Shanghai Municipal Tax Service (Trial)

Document of the Shanghai Municipal Tax Service Office of the State Taxation Administration

HSBF [2023] No. 33

　　Announcement of the Shanghai Municipal Tax Service of the State Taxation Administration on Issuing the Management Measures for Advance Tax Rulings of the Shanghai Municipal Tax Service (Trial)

Taxation bureaus of all districts in Shanghai and all taxation sub-bureaus and investigation bureaus of the Shanghai Municipal Tax Service of the State Taxation Administration, and all divisions, offices, and public institutions of the Shanghai Municipal Tax Service:

　　In order to regulate the city’s advance tax ruling work and improve the application clarity of tax policies, the Shanghai Municipal Tax Service has formulated the Management Measures for Advance Tax Rulings of the Shanghai Municipal Tax Service (Trial) (hereinafter referred to as the “Measures”). It is hereby issued to you for compliance. Where any problems arise during your implementation, please provide timely feedback to the Shanghai Municipal Tax Service.

　　Shanghai Municipal Tax Service Office of the State Taxation Administration

　　December 29, 2023

Management Measures for Advance Tax Rulings of the Shanghai Municipal Tax Service (Trial)

　　Chapter 1 General Provisions

　　Article 1 In order to further regulate the city’s tax advance ruling work and improve the application clarity of tax policies, These Measures are formulated in accordance with the work requirements for improving the new pattern of tax services and management for large enterprises.

　　Article 2 As far as These Measures are concerned, the term “advance tax ruling” (hereinafter referred to as “advance ruling”) refers to a service item that, in response to the request of enterprises for the application of tax laws and regulations to specific complex tax-related matters which are expected to occur in the future, the tax authorities provide written opinions on the application of relevant policies based on existing tax laws and regulations. The service is based on the principle of mutual trust between tax authorities and enterprises.

　　Article 3 An advance ruling is an individualized tax service for specific enterprises. It is not an administrative act that has a substantial impact on the rights and obligations of enterprises, and thus is not reviewable or litigable.

　　Chapter 2 Applicable Objects and Scope

　　Article 4 These Measures apply to business taxpayers operating in Shanghai.

　　Article 5 Advance rulings do not apply to the following matters:

　　(1) Matters without a pre-developed project plan or will not occur in the following two years;

　　(2) Matters without reasonable commercial purposes or expressly prohibited by relevant national laws and regulations;

　　(3) Matters to which explicit provisions in the existing tax laws and regulations may directly apply;

　　(4) Other matters to which advance rulings are not applicable.

　　Chapter 3 Application and Acceptance

　　Article 6 The authority that handles advance ruling matters is the Large Enterprise Management Department. Enterprises may apply to the Large Enterprise Management Department at the municipal or district level and submit to its relevant materials as required.

　　Article 7 Enterprises applying for an advance ruling (hereinafter referred to as the “applicants”) shall submit the following materials and be responsible for their authenticity and integrity:

　　(1) Application Form for Advance Tax Rulings (Annex 1), in which the applicant shall describe in detail the content of application (mainly including the matter of application, its opinions, the impact of advance rulings on production, operations and taxation, the situation of member enterprises and other enterprises involved, and the taxation period involved) and policy basis;

　　(2) Informed Consent Form for Advance Tax Rulings (Annex 2);

　　(3) In case that the matter of application requires prior approval or ruling by relevant authorities, the applicant shall submit the relevant approval or ruling documents;

　　(4) Relevant supporting materials such as contracts, agreements, meeting minutes or feasibility study reports;

　　(5) Other information required by the tax authorities.

　　Article 8 The authority handling the matter shall determine whether the application meets advance ruling requirements through means such as desk review or on-site investigation based on the materials submitted by the applicant.

　　(1) If the matter falls within the scope of acceptance and is supported by complete materials, the application will be accepted;

　　(3) If the matter falls within the scope of acceptance but is supported by incomplete materials, the authority shall notify the applicant within 5 working days from the date of receipt of the application materials to submit the remaining materials;

　　(4) If the matter is beyond the scope of acceptance, the application will be rejected; in such case, the authority shall notify the applicant of the reasons for rejection within 5 working days.

　　Article 9 In case that the application is accepted by the Large Enterprise Management Department of the competent tax authority, which, however, is determined to be unable to issue ruling opinions, the application shall be transferred to the Large Enterprise Management Department of the Shanghai Municipal Tax Service within 5 working days.

　　Article 10 In case that the application is accepted by the Large Enterprise Management Department of the Shanghai Municipal Tax Service, which determines through research that the competent tax authority is able to issue valid ruling opinions, the application shall be transferred to the Large Enterprise Management Department of the competent tax authority within 5 working days.

　　Article 11 Where the matter of application is subject to advance pricing arrangement, the application shall be transferred to the International Tax Administration Department and handled in accordance with the relevant procedures for advance pricing arrangement.

　　Chapter 4 Review and Ruling

　　Article 12 The application accepted by or transferred to the Large Enterprise Management Department shall be handled in a coordinated manner by the Office of the Leading Group for Taxation of Large Enterprises (hereinafter referred to as the “Large Enterprise Office”), which shall also organize the study of advance ruling opinions according to their responsibilities. The Large Enterprise Management Department shall be responsible for specific implementation.

　　Article 13 The Policy Service Group of the Large Enterprise Office shall form initial opinions within 30 days after accepting the application or transferred application, and shall solicit written opinions from relevant members of the Leading Group for Taxation of Large Enterprises (hereinafter referred to as the “Large Enterprise Leading Group”).

　　Article 14 The relevant members of the Large Enterprise Leading Group shall provide written feedback within 10 working days after receiving the initial opinions.

　　If they agree to the initial opinions, the Large Enterprise Office will report them to the Large Enterprise Leading Group for review. If they do not agree to the initial opinions, the Large Enterprise Office will convene a special meeting to study and discuss the matter, propose relevant opinions, and report them to the Large Enterprise Leading Group for review.

　　Article 15 For the advance ruling made by the Shanghai Municipal Tax Service, the No. 1 Taxation Sub-bureau shall issue the Tax Advance Ruling Opinions (Annex 3) to the applicant and send a copy to the competent tax authority.

　　Article 16 For the advance ruling made by the competent tax authority, it shall issue the Tax Advance Ruling Opinions to the applicant and submit it to the Large Enterprise Tax Management Department of the Shanghai Municipal Tax Service for filing within 5 working days.

　　Article 17 The ruling procedures may be terminated before an advance ruling is made under the following circumstances:

　　(1) The termination is requested by the applicant;

　　(2) The application cannot be reviewed as the applicant fails to provide necessary materials;

　　(3) Other circumstances in which it is necessary to terminate the ruling procedures.

　　Chapter 5 Follow-up Management

　　Article 18 Advance ruling opinions are applicable if the following conditions are met:

　　(1) The relevant materials submitted by the applicant are legal, true, accurate and complete;

　　(2) The tax matter actually taking place in the applicant is consistent with that described in the application materials;

　　(3) The laws and regulations based on which the tax authorities make their rulings have not changed.

　　Article 19 Advance ruling opinions shall only apply to the matter of application submitted by the applicant, rather than other taxpayers or other matters the ruling of which have not been made. The applicant shall not refuse to perform other tax obligations on the grounds of applying for advance rulings.

　　Article 20 The competent tax authority shall follow up on the ruling matter and be responsible for providing relevant services and managing relevant matters based on the actual operations of the applicant. The competent tax authority shall request the ruling authority to issue the Notice of Termination (Cancellation) of Advance Tax Rulings (Annex 4) to the applicant under the following circumstances:

　　(1) The taxpayer provides illegal, untrue, inaccurate or incomplete in formation;

　　(2) Substantial changes have taken place in the situation or conditions based on which the ruling was made;

　　(3) Changes have taken place in the laws and regulations on which the ruling is based, which have a substantial impact on ruling opinions.

　　Chapter 6 Miscellaneous

　　Article 21 When substantial changes take place in the matter of application or there are changes in the laws and regulations based on which the ruling is made, the applicant shall notify the competent tax authority by letter within 30 days upon such changes. In such case, the applicant may re-apply for an advance ruling on matters that are anticipated to occur in the future.

　　Article 22 Under special circumstances which are complex, have a significant impact, or require approval from superiors, the time limit specified in These Measures may be extended appropriately with the consent of the director of the Large Enterprise Office at the same level.

　　Article 23 The Large Enterprise Management Department of the Shanghai Municipal Tax Service shall actively promote cross-provincial cooperation and the integrated development of advance tax rulings for large enterprises in the Yangtze River Delta region.

　　Chapter 7 Supplementary Provisions

　　Article 24 Tax authorities and tax staff shall keep confidential the applicant’s business secrets and personal privacy in accordance with the Law of the People’s Republic of China on the Administration of Tax Collection and the provisions regarding confidentiality disciplines, and shall not leak the relevant information of the applicant.

　　Article 25 Outstanding matters herein shall be dealt with in accordance with relevant laws and regulations and the provisions of superior departments. These Measures shall be interpreted by the Shanghai Municipal Tax Service of the State Taxation Administration.

　　Article 26 These Measures shall come into effect from the date of promulgation.

　　Annexes: 1. Application Form for Advance Tax Rulings

　　　　　　 2. Informed Consent Form for Advance Tax Rulings

　　　　　　 3. Tax Advance Ruling Opinions

　　　　　　 4. Notice of Termination (Cancellation) of Advance Tax Rulings