5 Briefly explain the consequences of the following actions, including any fines or other penalty that may be
imposed:
(a) Failure to apply for tax registration. (2 marks)
(b) Non performance of tax withholding by an agent. (2 marks)
(c) Failure to file a tax return. (2 marks)
(d) Fraudulently obtaining a tax refund on an export. (4 marks)
(10 marks)

5 (a) The tax authority will impose a period for the taxpayer to remedy the situation and, if no remedy is made
within the period, may impose a fine up to RMB 2,000. If the case is serious, the tax authority may
impose a fine greater than RMB 2,000 but not more than RMB 10,000. 2
(b) If a withholding agent does not perform its statutory duty to withhold tax under the relevant tax laws, the
tax authority will pursue the tax from the taxpayer and impose a fine of over 50% but no more than three
times the tax on the agent. 2
(c) Where a tax payer or tax withholding agent fails to make a tax filing within the prescribed time limit, the
tax authority will order the failure to be rectified within a prescribed time limit and impose a fine up to
RMB 2,000. If the taxpayer or withholding agent still fails to comply, the tax authority may impose a fine
greater than RMB 2,000 but not more than RMB 10,000. 2
(d) Where a tax payer fraudulently gains an export tax refund by deceptive means such as fraudulently declaring the
export, the tax authority will pursue the repayment of the tax refund and impose a fine of over one time but
not more than five times the tax refund.
Criminal liability may also be pursued when a term of imprisonment ranging from below five years to a life
sentence may be imposed depending on the seriousness of the offence. 4
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10
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