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Eight Key Points of the Revision of the New Administrative Review Law and the Impact on Tax Administrative Review

Nov. 18, 2023, 11:02 p.m.
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On September 1, 2023, the Fifth Session of the Standing Committee of the Fourteenth National People's Congress voted to adopt the newly amended Administrative Review Law (hereinafter referred to as the "new Administrative Review Law"), which will come into force on January 1, 2024. The amendment of the Administrative Review Law starts from clarifying the principles of administrative review, improves the procedures of application, acceptance, hearing and decision-making, and strengthens the supervisory system of administrative review, which will help to better utilize the role of administrative review in resolving administrative disputes. In the field of taxation, administrative reconsideration is also an important channel for solving tax administrative disputes, and the promulgation and implementation of the new Administrative Reconsideration Law will have an impact on the tax administrative reconsideration as the superior law of the Tax Administrative Reconsideration Rules. This article will interpret the key contents of the new Administrative Reconsideration Law and extend it to the field of tax administrative reconsideration to analyze the changes and application of the relevant provisions.

I. Overall changes in the new Administrative Review Law

(I) The new administrative reconsideration law will better play a fair and efficient, convenient for the people of the advantages of the system

Liang Ying, Director of the Administrative Law Office of the Legislative Affairs Commission of the Standing Committee of the National People's Congress, pointed out that "the newly amended Administrative Reconsideration Law grasps the positioning and characteristics of the administrative reconsideration system, implements the deployment of reforms, summarizes the reform experience, focuses on enhancing the credibility and authority of administrative reconsideration, and focuses on solving the outstanding contradictions and problems that constrain administrative reconsideration from playing the role of the main channel for solving administrative disputes, so as to transform the institutional advantages of administrative reconsideration into institutional effectiveness. The advantages of the system have been transformed into its effectiveness.

In order to better play the role of administrative reconsideration as the main channel for resolving administrative disputes, the new Administrative Reconsideration Law, on the basis of retaining the chapter structure of the original Administrative Reconsideration Law, elevated part of the Implementing Regulations of the Administrative Reconsideration Law (hereinafter referred to as the Implementing Regulations) to the level of a law, and at the same time supplemented the system of simplified hearing procedures, administrative reconsideration committees, etc. The new Administrative Reconsideration Law has also introduced a new system of administrative review, which has been adopted by the Administrative Review Committee. (ii) The new Administrative Reconsideration Law was upgraded to a law.

(II) Significant adjustments to the content of the new Administrative Reconsideration Law

The original Administrative Reconsideration Law (2017) consists of seven chapters, including General Provisions, Scope of Administrative Reconsideration, Application for Administrative Reconsideration, Acceptance of Administrative Reconsideration, Decision on Administrative Reconsideration, Legal Liability and Supplementary Provisions. The new Administrative Reconsideration Law consists of seven chapters, including General Provisions, Application for Administrative Reconsideration, Acceptance of Administrative Reconsideration, Hearing of Administrative Reconsideration, Decision of Administrative Reconsideration, Legal Responsibility and Supplementary Provisions. The number of articles has been expanded from 43 to 90.      The new Administrative Reconsideration Law is organized in four stages, namely, application, acceptance, hearing and decision, which clarifies the process of administrative reconsideration and makes the logic of the articles clearer. At the same time, the new Administrative Reconsideration Law splits the key chapters into multiple sections, such as Chapter II, Application for Administrative Reconsideration, which has four sections, including the scope of administrative reconsideration, participants in administrative reconsideration, application for the filing of an application, and administrative reconsideration jurisdiction of the four sections.

II. Eight Key Points of the Revision of the New Administrative Reconsideration Law and Its Impact on Tax Administrative Reconsideration Cases

(I) Clarifying the administrative reconsideration committee system      

Prior to the promulgation of the new Administrative Review Law, a number of places had explored and piloted the administrative review committee system. The administrative reconsideration committee system can, to a certain extent, alleviate the problem of insufficient professionalism in administrative reconsideration, and is of great significance to the construction of specialized administrative reconsideration teams and the improvement of administrative reconsideration efficiency. The new Administrative Reconsideration Law enumerates the circumstances that should be referred to the Administrative Reconsideration Committee for advice in the hearing process, and makes it clear in Article 61 that for administrative reconsideration cases referred to the Administrative Reconsideration Committee for advice, the administrative reconsideration authority shall take the advice as an important reference basis for making administrative reconsideration decisions.

The Rules for Administrative Review of Taxation have already provided for the administrative review committee system, "Administrative review organs at all levels may set up administrative review committees to study major and difficult cases and make recommendations for handling them. The administrative reconsideration committees may invite persons with relevant professional knowledge from outside the organ to participate." Tax-related issues are highly specialized, and most of the tax-related dispute cases are complicated and difficult, etc. The new Administrative Reconsideration Law, as a superior law, specifies the circumstances that should be brought to the Administrative Reconsideration Committee, and in practice, the tax administrative reconsideration cases conforming to the circumstances should be permitted to be brought to the Administrative Reconsideration Committee for advice. The system of administrative reconsideration committee in the reconsideration process improves the professionalism of the hearing of cases, especially the participation of external experts and scholars in the hearing of cases, which is of certain significance for the proper settlement of disputes and the improvement of the efficiency of administrative reconsideration in taxation.

(II) Expanding the scope of application of mediation and conciliation in administrative reconsideration

The original Administrative Reconsideration Law does not provide for administrative reconsideration, mediation and conciliation related content, but in the Implementation Regulations specify the applicable circumstances of administrative reconsideration, mediation and conciliation. The new Administrative Reconsideration Law makes it clear that mediation in administrative reconsideration is no longer limited to "citizens, legal persons or other organizations applying for administrative reconsideration against specific administrative acts made by administrative organs in the exercise of their discretionary powers under laws and regulations" and "disputes over administrative compensation or administrative indemnification between the parties". "These two cases have expanded the scope of application of mediation and conciliation in administrative reconsideration, which is of great significance in playing the role of administrative reconsideration as the main channel for resolving administrative disputes.

In the field of taxation, the Rules for Tax Administrative Reconsideration stipulate that specific administrative acts made in the exercise of discretionary power, administrative compensation, administrative rewards and specific administrative acts where there are other issues of reasonableness can be subject to administrative reconsideration and conciliation or mediation, whereas the new Administrative Reconsideration Law no longer restricts the scope of mediation and conciliation. For some tax-related disputes with a long history, complicated and confusing relevant information, and difficult to find out the disputed facts, it is of great significance to put forward the proposal of settlement or mediation on the basis of evidence in order to improve the administrative efficiency and properly resolve the disputes, and it is also conducive to the maintenance of good tax-enterprise relations.

In practice, tax administrative reconsideration cases are handled in accordance with the provisions of the Tax Administrative Reconsideration Rules, and there is a conflict of law in the future when the new Administrative Reconsideration Law comes into effect but the Tax Administrative Reconsideration Rules have not been adjusted accordingly. In the author's opinion, according to the superiority of law, the Administrative Reconsideration Law is a law enacted by the Standing Committee of the National People's Congress, and its application should be prioritized over the departmental rules and regulations of the Administrative Reconsideration Rules for Taxation. Therefore, in tax administrative reconsideration cases after the entry into force of the new Administrative Reconsideration Law, administrative reconsideration mediation or conciliation can be applied based on the provisions of articles 5 and 74 to expand the scope of application.

(III) The request for information on the circumstances leading to reconsideration.     

The original "Administrative Review Law" only lists the administrative relative that the administrative organ's specific administrative act violates the right of ownership or use of natural resources such as land, minerals, etc., which has been acquired by the administrative organ in accordance with law, should apply for administrative review first, and the other circumstances that need to be preceded by review are stipulated in the specific departmental regulations. Article 88 of the Law on Administration of Tax Collection specifies that taxpayers, withholding agents, tax guarantors and tax authorities in tax disputes, the tax authorities must first be in accordance with the decision of the tax authorities to pay or cancel the payment of taxes and late fees or to provide the corresponding guarantee, and then can apply for administrative reconsideration, the administrative reconsideration of the decision is not satisfied, according to law, you can sue the people's court. The new Administrative Reconsideration Law optimizes the scope of administrative reconsideration, and makes it clear that those who are not satisfied with the administrative penalty decision made on the spot, failure to perform statutory duties, and non-disclosure of government information should apply for administrative reconsideration first, which can reduce the pressure of litigation on the judiciary, but it may have a certain impact on the relief of taxpayers' rights.

In addition, the new administrative reconsideration law at the same time clearly for the need for administrative reconsideration before the situation, the administrative organ in the administrative act should inform the citizens, legal persons or other organizations to apply for administrative reconsideration to the administrative reconsideration authorities, to ensure that the administrative relative to the timely exercise of its right to relief. In practice, the tax processing decision made by the Inspection Bureau generally states that if the taxpayers have disputes over the taxing behavior involved, they shall apply for administrative reconsideration to the reconsideration authority after paying the tax and the late payment or providing the corresponding tax guarantee within the stipulated period of time.

(IV) Clarifying the scope and procedures for review of normative documents      

The new Administrative Reconsideration Law provides for the incidental review of administrative reconsideration in a section of Chapter IV of the Administrative Reconsideration Hearings, clarifies the scope of administrative reconsideration that can be applied to the administrative reconsideration organ for incidental review of normative documents, and specifies the applicable procedures. In the field of taxation, due to the complexity of the tax law system, in tax-related disputes, there are problems of legal application, such as conflicts between higher and lower laws, and the review of normative documents has the important function of clarifying the legal basis. It is worth discussing that Article 58 of the new Administrative Reconsideration Law stipulates that if the review body notifies the organ that formulates the normative document in writing to submit a written reply on the legality of the relevant provisions, the organ shall submit a written reply and relevant information. In practice, after the applicant submits an application for review of a normative document, he usually only obtains the result of whether the normative document in question is legal or not. In the author's opinion, in the tax administrative reconsideration, the taxpayer, as the applicant, shall have the right to fully understand the specific reasons for the review, and the reconsideration organization shall explain to the applicant when informing the result of the review.

(V) The new reconsideration authority's right to investigate and obtain evidence, allowing the applicant and others to copy evidence     

The new Administrative Reconsideration Law clarifies the types of evidence, the burden of proof of the applicant and the respondent, and the right of the administrative reconsideration authority to investigate and obtain evidence. In terms of the rules of evidence, the second paragraph of Article 46 of the new Administrative Reconsideration Law provides that "during the period of administrative reconsideration, if the applicant or the third party puts forward reasons or evidence that were not put forward at the time when the administrative act for which administrative reconsideration is being applied for was made, with the consent of the administrative reconsideration body, the respondent may supplement the evidence." This provision strengthens the respondent's burden of proof to a certain extent, but such a situation should exclude the influence of the power to initiate evidence transfer under Article 45, and the review body cannot help the respondent to collect evidence, or it may increase the difficulty of taxpayers in safeguarding their rights. Article 60 of the Administrative Review Rules for Taxation has stipulated that the administrative reconsideration organization may conduct investigation and evidence collection when it deems necessary. In the author's opinion, the investigation and collection of evidence by the administrative reconsideration authority shall be limited to providing evidence to support its administrative reconsideration decision, and shall not break the principle of "the respondent shall not collect evidence from the applicant and other relevant organizations or individuals" in the process of reconsideration.

In addition, Article 47 of the new Administrative Reconsideration Law allows the applicant, the third party and the authorized agent to make copies of the evidence materials, and the Rules for Administrative Reconsideration of Taxation only stipulates that the applicant and the third party can access the written reply submitted by the respondent, the evidence of the specific administrative act and other materials, and the revision of this new Administrative Reconsideration Law will facilitate the applicant to carry out the work of administrative reconsideration in a better way.

(VI) Addition of summary procedures for administrative reconsideration hearings    

Chapter IV of the new Administrative Review Law distinguishes between "ordinary procedures" and "summary procedures" in two subsections, and stipulates the circumstances in which summary procedures may be applied to administrative review hearings. The new summary procedure added in this amendment is of certain significance in improving the efficiency of administrative reconsideration and resolving disputes in a timely manner. It should be noted that the new Administrative Reconsideration Law only in the ordinary procedures chapter provides for the review body should hear the applicant and the system of hearings, summary proceedings have no relevant provisions. At the same time, the deadlines for the respondent to submit a written reply and evidence are different between the summary procedure and the ordinary procedure, and the deadlines for the reconsideration authority to make a reconsideration decision are also different. At present, the Tax Administrative Review Rules do not provide for the summary hearing procedure. After the new Administrative Review Law comes into effect, taxpayers should clarify whether the ordinary or summary procedure is applicable in the tax administrative review process, and pay attention to whether they can apply for a hearing and whether the various deadlines are correctly applied.

(VII) Clarifying that the review body shall hear the views of the parties concerned in ordinary proceedings, and shall organize hearings in major difficult and complex cases.     

The new Administrative Reconsideration Law specifies that in ordinary proceedings, the administrative reconsideration body shall hear the views of the parties and record the views heard. If the parties cannot be heard, the hearing may be conducted in writing. The new law also stipulates that a hearing system shall be organized for major difficult and complex cases.

Article 65 of the Administrative Review Rules for Taxation stipulates that, for major and complicated cases, if the applicant makes a request or the administrative review body deems it necessary, it may adopt the hearing method to hear the case. The Administrative Review Rules for Taxation stipulate that administrative review shall, in principle, be conducted in writing, but the applicant, the respondent and the third party shall be heard when the applicant so requests or the administrative review body deems it necessary. For major, complex cases, the applicant may request or the administrative review body may consider it necessary to hear the case. Based on the application of the new Administrative Reconsideration Law and the Tax Administrative Reconsideration Rules discussed in the previous section, the author believes that the Administrative Reconsideration Law, as a superior law, shall take precedence over the Tax Administrative Reconsideration Rules for application, and that the reviewing authority shall listen to the parties in tax administrative reconsideration cases after the new law comes into effect and shall organize hearings in cases of great significance, difficulty and complexity. The changes in the foregoing provisions have increased the channels and opportunities for taxpayers to express their views on presentation and defense, promoted effective communication between taxpayers and tax authorities, and helped to promote the reconsideration procedures as soon as possible and resolve tax-related disputes in a timely manner.

(VIII) Refinement of the application of review decisions such as change and confirmation of violation of law      

The new Administrative Reconsideration Law has refined the application of administrative reconsideration decisions such as change, revocation and confirmation of violation of law, and increased the types of decisions such as confirmation of nullity, so as to provide an operational basis for the reconsideration authorities to make reconsideration decisions. The Tax Administrative Reconsideration Rules are mainly in accordance with the provisions of the former Administrative Reconsideration Law, and the amendment of the new law will also clarify the circumstances under which the tax administrative reconsideration authorities make reconsideration decisions and standardize the behavior of administrative reconsideration.

In addition, Article 79 of the new Administrative Reconsideration Law makes it clear that the administrative reconsideration authority shall make the administrative reconsideration decision public in accordance with the relevant provisions of the State in accordance with the publicity of the administrative act for which the administrative reconsideration is applied. This provision helps to promote the publicizing of government affairs, enhance the credibility of administrative organs, and promote administration in accordance with the law.

In addition to the aforementioned amendments, the new Administrative Reconsideration Law elevates some of the provisions of the Regulations for the Implementation of the Administrative Reconsideration Law to law, such as clarifying the conditions for acceptance of administrative reconsideration (Article 30), setting out the "negative list" of cases that do not fall within the scope of administrative reconsideration (Article 12), clarifying the circumstances of suspension and termination of administrative reconsideration (Articles 39, 41), adding a new provision of administrative reconsideration, and adding a new provision of administrative reconsideration. (Article 39, Article 41), the addition of a system for making corrections to application materials (Article 30), and a system of administrative reconsideration opinions (Article 76).

III. Convergence and practice of the new Administrative Reconsideration Law and the Administrative Reconsideration Rules for Taxation

As mentioned before, the Administrative Review Law is a law enacted by the Standing Committee of the National People's Congress, and the Administrative Review Rules for Taxation is a departmental regulation enacted by the State Administration of Taxation. According to the principle of superiority of law, when there is a conflict of application, the Administrative Review Law shall be prioritized over the Administrative Review Rules for Taxation.

In practice, the tax administrative reconsideration authorities to hear specific administrative reconsideration cases in accordance with the provisions of the "Tax Administrative Reconsideration Rules", therefore, in the new "Administrative Reconsideration Law" came into force, the "Tax Administrative Reconsideration Rules" part of the provisions of the "Administrative Reconsideration Law" will be in conflict with the "Administrative Reconsideration Law", such as mediation and settlement of the application of the provisions of the ordinary procedures to hear the views of the hearing system of major and difficult cases. In the author's opinion, with the revision of the previous law, the Rules for Administrative Review of Taxation need to be adjusted accordingly, so as to reduce the conflict of legal application in practice and improve the legitimacy of the administrative review process of taxation. At the same time, as far as tax administrative reconsideration cases are concerned, the reconsideration authorities, applicants and agents should pay attention to the application of specific procedures after the implementation of the new law, so as to avoid damaging their own legitimate rights and interests due to procedural and legal application errors or causing administrative litigation disputes.

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