PRC – Current tax controversy resolution alternatives: use of administrative remedies

Tax Controversy & Dispute Resolution ()

Tax controversy resolution alternatives in China – taxation administrative reconsideration and administrative litigation

The State Administration of Tax (the "SAT") recently issued the Notice of Shandong State Tax Bureau Regarding the Application of International Transport Article under the Double Tax Agreements ("DTA"), Circular Guoshuibanfa [2011] No. 34, ("the Notice"). The Notice reported a tax controversy case where a taxpayer had a dispute over the tax treatment adopted by the tax authority. Through tax administrative reconsideration and administrative litigation, the taxpayer challenged the tax treatment. Although the People’s Court eventually upheld the decision of the tax authority, this case demonstrates the taxpayer’s efforts to protect its legitimate rights and interests via tax administrative reconsideration and administrative litigation.