CHAPTER IV-TAX INSPECTION

　　Article 32 The tax authorities shall have the right to conduct tax inspection as follows：

　　（1） to inspect a taxpayer's accounting books， supporting vouchers for the accounts， statements and the relevant information； to inspect a withholding agent's accounting books， supporting vouchers for the accounts and the relevant information in respect of the amount of tax withheld and remitted or collected and remitted.

　　（2） to inspect a taxpayer's taxable commodities， goods or other property at the taxpayer's places where production or business operations are conducted and places where goods are stored； to inspect a withholding agent's operational conditions in respect of the withholding and remittance of tax or the collection and remittance of tax.

　　（3） to order a taxpayer or withholding agent to furnish documents， evidentiary materials and information pertaining to the payment of tax or the amount of tax withheld and remitted or collected and remitted.

　　（4） to make inquiries of a taxpayer or withholding agent regarding the relevant issues and circumstances connected with the payment of tax or the amount of tax withheld and remitted or collected and remitted.

　　（5） to inspect supporting documents， vouchers and information pertaining to the taxable commodities， goods or other property transported by consignment or sent by post by a taxpayer at railway stations， docks， airports， enterprises engaged in postal services and the branches thereof.

　　（6） upon approval of the commissioner of a tax bureau （or a sub bureau thereof） above the county level， to examine and verify the deposit accounts that a taxpayer engaged in production or business operations or a withholding agent has opened with banks or other financial institutions， on presentation of a permit for the inspection of deposit accounts which is of a nationally unified form； to examine and verify the savings deposits of a taxpayer engaged in production or business operations， provided， however， that the saving deposits have been subject to the verification of the regional office of a county or municipal sub branch or municipal branch of a bank and such regional office has designated a savings section thereof to provide the relevant information.

　　Article 33 A taxpayer or withholding agent must subject itself to the tax inspection conducted by the tax authorities in accordance with the law， report the circumstances accurately and provide the relevant information， and shall not refuse to cooperate or conceal any facts.

　　Article 34 When the tax authorities conduct tax inspection in accordance with the law， the relevant departments and units shall provide support and assistance and accurately report the circumstances of taxpayers， withholding agents and other parties concerned in respect of the payment of tax and the amount of tax withheld and remitted or collected and remitted， and furnish the relevant information and evidentiary materials.

　　Article 35 When investigating a tax case in violation of the law， the tax authorities may record， tape-record， video-tape， photograph and reproduce the relevant circumstances and information in respect of the case.

　　Article 36 When conducting tax inspection， the officials sent by the tax authorities shall produce tax inspection identity cards and shall be responsible for maintaining confidentiality for the persons under investigation.

　　CHAPTER V-LEGAL LIABILITIES

　　Article 37 The tax authorities shall order a taxpayer to remedy any of the following acts committed by the taxpayer within a time limit. Should the taxpayer fail to remedy it within the time limit， the tax authorities may impose a fine of not more than Renminbi 2000 Yuan on the taxpayer. If the case is serious， the tax authorities may impose a fine of an amount from Renminbi 2000 Yuan to Renminbi 10000 Yuan on the taxpayer.

　　（1） failure to apply for tax registration， change or cancellation of tax registration within a prescribed time limit；

　　（2） failure to keep or maintain accounting books， or maintain supporting vouchers for the accounts and the relevant information in accordance with the relevant provisions；

　　（3） failure to furnish reports on the financial and accounting systems or the financial and accounting methods to the tax authorities for possible reference use in accordance with the relevant provisions.

　　Article 38 where a withholding agent fails to keep and maintain accounting books for the tax withheld and remitted or collected and remitted， or to maintain supporting vouchers for the accounts and the relevant information in respect of the tax withheld and remitted or collected and remitted in accordance with the relevant provisions， the tax authorities shall order the withholding agent to remedy the situation within a time limit. Should the withholding agent fail to remedy the situation within the time limit， the tax authorities may impose a fine of not more than Renminbi 2000 Yuan on the withholding agent. If the case is serious， the tax authorities may impose a fine of an amount from Renminbi 2000 Yuan to Renminbi 5000 Yuan on the withholding agent.

　　Article 39 where a taxpayer fails to fulfil tax filing requirements within a prescribed time limit or a withholding agent fails to furnish reporting schedules on the tax withheld and remitted or collected and remitted to the tax authorities within a prescribed time limit， the tax authorities shall order the taxpayer or withholding agent to remedy the situation within the prescribed time limit and may impose a fine of not more than Renminbi 2000 Yuan on the taxpayer or withholding agent. Should the taxpayer or withholding agent fail to remedy the situation within the prescribed time limit， the tax authorities may impose a fine of over Renminbi 2000 Yuan but under Renminbi 10000 Yuan on the taxpayer or withholding agent.

　　Article 40 “Evasion of tax” means that a taxpayer fails to pay or underpays the amount of tax payable through the adoption of the means of forging， revising， concealing or destroying without authorization accounting books or supporting vouchers for the accounts， or of overstating expenses or not stating or understating income in accounting books， or of filing fraudulent tax returns. where the amount of tax evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan， or where the taxpayer evades tax again after having been subject to administrative punishment imposed by the tax authorities twice as a result of tax evasion， the tax authorities shall， in addition to pursuing the payment of tax which has been evaded by the taxpayer， impose a punishment on the taxpayer in accordance with the provisions set forth in Article 1 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. where the amount of tax evaded is under Renminbi 10000 Yuan or accounts for not more than ten percent of the amount of tax payable， the tax authorities shall pursue the payment of the tax evaded and impose a fine of not more than five times the amount of tax evaded.

　　where a withholding agent fails to pay or underpays the tax which has been withheld or collected through the adoption of the means as specified in the preceding Paragraph， and where the amount of tax evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan， a punishment shall be imposed on the withholding agent in accordance with the provisions stipulated in Article 1 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. where the amount of tax evaded is under Renminbi 10000 Yuan or accounts for not more than ten percent of the amount of tax payable， the tax authorities shall pursue the payment of the amount of tax the withholding agent has failed to pay or underpaid and impose a fine of not more than five times the amount of tax which has not been paid or underpaid.

　　Article 41 where a taxpayer who has failed to pay the amount of tax payable by means of transferring or concealing the property， resulting in failure on the part of the tax authorities to pursue the payment of the tax underpaid， and where the amount of the tax underpaid is over Renminbi 10000 Yuan， the tax authorities shall， in addition to pursuing the payment of the tax underpaid， impose a punishment on the taxpayer in accordance with the provisions set forth in Article 2 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. where the amount of tax underpaid is under Renminbi 10000 Yuan， the tax authorities shall pursue the payment of the tax underpaid， and impose a fine of not more than five times the amount of tax underpaid.

　　Article 42 where an enterprise or institution commits an illegal act as specified in Article 40 and 41 of this Law and such act constitutes an offence， a punishment shall be imposed in accordance with the provisions set forth in Article 3 of the Supplementary Provisions Concerning the Imposition of Punishment in Respect of Offenses of Evasion of Tax and Refusal to Pay Tax. where such act does not constitute an