How to evaluate Enterprise Taxation Credit Grade?

The authorities by evaluating the taxpayers to comply with tax laws and regulations, financial accounting system and fulfill its obligations to pay taxes according to the set of evaluation criteria, sets the taxpayers’ Taxation Credit Grade to A, B, M, C, D. The higher grade you have, the more convenience you can enjoy.
Most taxpayers have no idea about their Enterprise Taxation Credit Grade or even how the five grades are evaluated.
Today, we will introduce Enterprise Taxation Credit Grade here.

01 Enterprise Taxation Credit Grade Evaluation Metho

● Annual Appraisal Rate

● Direct judgment by tax bureau

The annual appraisal rate is deducted. For taxpayers who have complete information on recurring and non-recurring indicators in the year, the evaluation starts from 100 points; for non-recurring indicators, the evaluation starts from 90 points.
The direct judgment is applicable to taxpayers with serious dishonesty behavior.

“Announcement No. 15 of 2020 by the State Administration of Taxation, “The tax authorities will receive relevant inspections within an evaluation year from 100 points, adjusted to 100 points as long as they have received relevant inspections from tax authorities within the past three evaluation years. This will greatly increase the number of companies with a starting point of 100 points and increase the probability to judge taxpayers as Grade A and B.

It will take effective from 2020 annual evaluation.

02 Enterprise Taxation Credit Grade Scoring Basis

The tax authority evaluates the credit status of corporate taxpayers from below four indications, including subjective attitudes, compliance capabilities, actual results, and degree of dishonesty and nearly 100 evaluation indicators.

The appraisal rate are divided into five grades: A, B, M, C, and D from high to low.

Grade A: The annual appraisal rate is more than 90 points;
Grade B: The annual appraisal rate more than 70 points but less than 90 points;
Grade M: Newly established enterprises or no income from production and operation during the evaluation year and the annual appraisal rate is more than 70 points;
Grade C: The annual appraisal rate more than 40 points but less than 70 points;
Level D: The annual appraisal rate is less than 40 points or directly judged and determined by tax bureau.
Once a company is judged as D-level, it will be very difficult for your business operations, please do pay more attention to it!

03 When to evaluate Enterprise Taxation Credit Grade

1) Every year in Apr, tax bureau will release company’s credit grade result, provide taxpayers with self-inquiry services;

2) Taxpayers who have objections to the evaluation of the indicators can fill in the “Tax Credit Reassessment (Verification) Application Form” in March of the following evaluation year and submit an application to review the situation to tax bureau. Tax bureau will determine the evaluation result adjust at the same time in Apr.

The taxpayers with serious circumstances may be kept the appraisal result for two years and only have the chance to apply for re-appraisal after two years. Final results will be subject to tax bureau’s decision.