Editor's Note: Recently, the State Taxation Administration (STA) and the Supreme People's Court (SPC) jointly issued the Announcement on Several Issues Concerning the Administration of Taxes and Fees in the Enterprise Bankruptcy Process (No. 24 of 2025), aiming to further standardize the administration of taxes and fees in the enterprise bankruptcy process and improve the certainty and uniformity of law enforcement. The Announcement responds to long-standing controversial issues such as the nature of tax and fee claims and the priority of repayment for newly incurred taxes, reflecting the joint efforts of the judicial and administrative authorities to regulate tax-related matters in bankruptcy proceedings. However, some provisions still have ambiguous expressions, which may lead to differences in understanding in practical operation. Based on the provisions, combined with judicial cases and practical scenarios, this article combs and interprets the key contents of the Announcement item by item, analyzes the relevant tax risks from the perspective of bankruptcy administrators, and puts forward suggestions for properly resolving tax-related disputes.

 

Overview of Article 1 of the Announcement

Paragraph 1 clarifies the main scope of tax and fee claims declared by tax authorities in the bankruptcy process, including three parts: taxes owed by enterprises (including education surcharges and local education surcharges), tax late payment surcharges, fines, and interest on special tax adjustments; social insurance premiums and their late payment surcharges; and non-tax revenues collected by tax authorities with clear legal liabilities and policy bases, as well as their late payment surcharges (liquidated damages).

Paragraph 2 distinguishes the declaration categories and claim natures of the various tax and fee claims mentioned in Paragraph 1. Taxes and social insurance premiums shall be declared separately; tax late payment surcharges and interest shall be declared as ordinary claims; and social insurance premium late payment surcharges and fines shall be declared in accordance with relevant provisions.

Paragraph 3 clarifies two duties of tax authorities: promptly obtaining enterprise bankruptcy information and providing tax-related information to people's courts. It also specifies the collaborative obligation of people's courts and tax authorities to establish an enterprise bankruptcy information sharing mechanism.

Key Points Interpretation

1. The Nature of Tax Late Payment Surcharges Remains Unchanged

In September 2025, the 17th Meeting of the Standing Committee of the 14th National People's Congress deliberated and publicly solicited opinions on the Enterprise Bankruptcy Law (Revised Draft). Article 162 of the Revised Draft includes late payment surcharges in "(IX) Punitive claims such as late payment surcharges on unpaid debts of the bankrupt before the acceptance of the bankruptcy application, civil punitive damages, administrative fines, and criminal fines". Some opinions hold that this indicates an intention to classify late payment surcharges as subordinated debts.

However, Paragraph 2 of Article 1 of the Announcement clearly stipulates that tax late payment surcharges and interest are not subordinated debts but shall be declared as ordinary bankruptcy claims, maintaining the claim nature of tax late payment surcharges, which is consistent with the mainstream opinion in current judicial practice. It should be noted that this definition takes the date of the people's court's acceptance of the bankruptcy application as the node and does not apply to late payment surcharges incurred thereafter.

2. The Nature of Education Surcharges, Local Education Surcharges, and Social Insurance Premium Late Payment Surcharges is Not Clearly Stated

In some past judicial cases, there have been certain disputes over whether education surcharges and local education surcharges should be classified as tax claims or ordinary claims. Some tax authorities argue that they belong to taxes and are tax claims in nature, but courts often do not support such claims, such as Case No. (2022) Ji 01 Min Chu 3135. According to the Measures for the Administration of Government Non-tax Revenues, government funds are non-tax revenues that are significantly different from taxes. According to the Catalogue of National Government Funds announced by the Ministry of Finance, both education surcharges and local education surcharges are government funds. Based on the above provisions, education surcharges and local education surcharges are both non-tax revenues in nature. Since they are non-tax revenues, they do not belong to taxes and cannot be classified as tax claims in the bankruptcy process, but should be included in ordinary claims.

However, Paragraph 1 of Article 1 of the Announcement includes education surcharges and local education surcharges when referring to taxes owed by enterprises. Paragraph 2 separately lists taxes owed by enterprises and social insurance premiums and requires separate declaration, which implies that education surcharges and local education surcharges may be classified as preferential tax claims. In fact, the expression of including education surcharges and local education surcharges in taxes first appeared in STA Announcement No. 48 of 2019. The difference between this Announcement and STA Announcement No. 48 of 2019 is that it not only retains this inclusive expression but also distinguishes the declaration category as "separate declaration" and formulates rules jointly with the SPC, which inevitably makes people wonder whether the SPC intends to treat education surcharges and local education surcharges as tax claims.

In addition, Paragraph 2 of Article 1 of the Announcement lists social insurance premium late payment surcharges and fines as a group, which also seems to indicate an intention to downgrade social insurance premium late payment surcharges from the previous ordinary claims to subordinated debts, which may deviate from the views in past judicial practice. In Case No. (2024) Ji 08 Min Zhong 1490, the tax authority claimed that social insurance premium late payment surcharges were preferential claims, but the court held that the Enterprise Bankruptcy Law only defines social insurance premiums as preferential claims and does not include social insurance premium late payment surcharges in preferential claims. Referring to the nature of tax late payment surcharges, social insurance premium late payment surcharges should be classified as ordinary claims.

Regarding the definition of the nature of the two education surcharges and social insurance premium late payment surcharges, the provisions of Article 1 of the Announcement are not perfectly clear, and may instead trigger some disputes in bankruptcy practice. It is expected that the SPC will clarify these issues or express its views by publishing typical cases. It is recommended that bankrupt enterprises and practitioners pay attention to this to properly prevent risks and resolve disputes.

3. Relieving Administrators of Non-statutory Notification Obligations

Paragraph 3 of Article 1 of the Announcement clarifies that tax authorities have the primary duty and obligation to promptly obtain information on the people's court's acceptance of bankruptcy applications, and the collaborative obligation of people's courts to establish an information sharing mechanism with tax authorities. More importantly, the Announcement does not impose additional obligations and responsibilities on administrators in terms of tax authorities' access to bankruptcy information, which relieves the role of administrators in practice.

At present, in the tax-related bankruptcy documents jointly issued by some local tax authorities and people's courts, administrators are often imposed with non-statutory notification obligations. For example, the Opinions on Handling Tax-related Issues in the Enterprise Bankruptcy Process (Chuan Gao Fa Fa [2021] No. 4) issued by Sichuan Province in 2021 and the Implementation Opinions on Optimizing the Business Environment by Properly Handling Tax-related Matters in Enterprise Bankruptcy Disposal (Su Gao Fa [2020] No. 224) issued by Jiangsu Province in 2020 both stipulate that administrators shall notify the competent tax authorities to declare tax claims within 25 days from the date of the ruling on accepting the bankruptcy application. However, according to Article 14 of the Enterprise Bankruptcy Law, administrators do not actually have this statutory obligation; only people's courts have this obligation. Therefore, the issuance of the Announcement is conducive to clarifying the responsibilities of tax authorities and people's courts and promoting local authorities to clean up irregular provisions in bankruptcy judicial documents.

Overview of Article 2 of the Announcement

Paragraph 1 stipulates three very important rules: the cut-off date of tax claims, accelerated maturity, and suspension of administrative enforcement. Paragraph 2 specifies the administrator's obligation to declare taxes and the method of handling tax affairs during the bankruptcy process.

Key Points Interpretation

1. Tax Claims are Calculated and Determined with the Date of the People's Court's Acceptance of the Bankruptcy Application as the Cut-off Date

According to Paragraph 1 of Article 2 of the Announcement, the key to judging whether a tax claim is a bankruptcy claim lies in whether the time of occurrence of the tax liability and the tax payment period are before the date of the people's court's acceptance of the bankruptcy application; the calculation of tax late payment surcharges shall end on the date of the people's court's acceptance of the bankruptcy application. This rule is consistent with the relevant handling practices in past judicial trials and also conforms to the basic rules of the Enterprise Bankruptcy Law.

2. Understanding and Application of the Rule on Accelerated Maturity of Tax Declaration Periods

This part of Article 2 of the Announcement is relatively complex, difficult to understand and apply, and there are still some ambiguities in the rules themselves, which may lead to some disputes in practice. The following analysis is carried out with examples.

Take value-added tax (VAT) declared and paid on a monthly basis as an example. Suppose the people's court accepts the bankruptcy on April 10, 2026. Then the entire tax payment period of March 2026 is before the acceptance date. Although the deadline for the declaration period (April 15) has not yet arrived, it is deemed to have matured, and the VAT for March is a bankruptcy tax claim. The problem arises in April, that is, the tax payment period of April crosses the acceptance date. Is the VAT for April still a bankruptcy claim? The original provision of Article 2 of the Announcement is that "taxes and fees have occurred" and "the declaration period has not expired". However, the status of the VAT for April in the example is "has occurred", "not fully occurred", and "the declaration period has not yet started", which may lead to disputes in practice.

Take urban land use tax declared and paid on a quarterly basis as an example. Suppose the people's court accepts the bankruptcy on March 10, 2026. It can be seen that the tax payment period for the first quarter of urban land use tax has not yet expired, and the declaration period has not yet started, so the provisions of the Announcement are difficult to apply correspondingly. In practice, tax authorities and administrators often negotiate and confirm to adjust the period from January 1 to March 10, 2026 as a tax payment period for declaration and confirmation of tax claims.

Take land value increment tax (LVIT) liquidation as an example. In addition to the disputes over the tax payment period crossing the cut-off date mentioned in the above examples, disputes are also likely to arise in situations where the sequence between the occurrence time of tax liability and the cut-off date is uncertain, such as LVIT. Suppose a company's project has met the liquidation conditions in February 2026, but the tax authority has not notified the liquidation, and the people's court accepts the bankruptcy application on March 1, 2026. For such a situation, according to the official interpretation of the STA, the tax authority may issue a liquidation notice to the enterprise after the people's court accepts the bankruptcy application, the enterprise shall continue to file the LVIT liquidation declaration, and the tax authority may declare the LVIT liquidation tax as a bankruptcy tax claim. This interpretation standard breaks through the basic rule of "no liquidation obligation without notification" for liquidable types to a certain extent and should be paid attention to as an exception in the bankruptcy process.

The above examples reflect that the provisions of the Announcement only consider the situation where the declaration period has started but not expired, and fail to consider the situation where the tax payment period has started but not expired and the situation where the tax payment conditions are met but the tax liability has not yet occurred. The STA needs to issue specific implementation standards to clarify some specific difficult matters. For these controversial situations, tax authorities, bankruptcy administrators, and other creditors can resolve them through negotiation. If the disputes cannot be resolved, it is necessary to consider them from the perspective of the Enterprise Bankruptcy Law and the specific rules of individual tax types.

Overview of Article 3 of the Announcement

Paragraph 1 stipulates the continued execution of tax-related illegal inspection procedures and the time limit for supplementary declaration. Paragraph 2 specifies the handling of the cancellation of the abnormal status of bankrupt enterprises.

Key Points Interpretation

The provisions of Paragraph 1 of Article 3 of the Announcement are essentially regulatory provisions on the duty of tax authorities to speed up the handling and punishment of pending cases of bankrupt enterprises and declare claims in a timely manner, with the binding object being tax authorities. According to this paragraph, if an enterprise's illegal act has been discovered by the tax authority and a tax inspection has been initiated but not completed before the acceptance of the bankruptcy, the tax inspection procedure may continue after the people's court accepts the bankruptcy application, but the tax authority has the obligation to terminate the inspection procedure and make a handling and punishment decision before the expiration of the claim declaration period. If the tax authority cannot close the case within the claim declaration period, it shall also close the case and declare the claim before the creditors' meeting votes on the bankruptcy property distribution, reorganization, and settlement plan for the first time. There are two issues worthy of attention and discussion here.

First, according to the provisions of the Enterprise Bankruptcy Law, the time for creditors to supplement the declaration of claims determines their eligibility to participate in the distribution of bankruptcy property. According to current judicial practice, if a creditor can supplement the declaration of claims before the bankruptcy property distribution plan is submitted to the creditors' meeting for discussion, they can participate in this round and subsequent distributions of bankruptcy property. It can be seen that the time node for tax authorities to supplement the declaration of claims specified in the Announcement is more favorable than that for other creditors, that is, the deadline is the creditors' meeting's vote on the property distribution plan rather than the discussion on the plan.

Second, the Announcement does not stipulate the legal consequences if the tax authority fails to supplement the declaration before the first vote. According to the rules of the Enterprise Bankruptcy Law, if the tax authority fails to supplement the declaration before the first vote, it cannot participate in the first round of bankruptcy property distribution. In this case, the tax authority will bear a certain risk of unpaid taxes, which may force the tax authority to raise objections to the bankruptcy property distribution procedure to a certain extent, thereby causing disputes and conflicts with other creditors. From this perspective, unresolved tax inspection matters may slow down the voting procedure of the creditors' meeting and increase the difficulty of bankruptcy reorganization and settlement. Reorganization investors should pay special attention to such investment risks and disputes.

Overview of Article 4 of the Announcement

Paragraph 1 reaffirms that the statutory obligations of enterprises regarding taxes and fees remain unchanged during the bankruptcy process. Paragraph 2 specifies the claim nature of newly incurred taxes during the bankruptcy process and invoice management.

Key Points Interpretation

The focus of this article is Paragraph 2, which clearly defines the newly incurred taxes and fees during the enterprise's bankruptcy process as bankruptcy expenses and common benefit debts according to different situations, to be repaid at any time from the bankruptcy enterprise's property. This rule has been supported and confirmed in past judicial trial practices.

However, in practice, there is still great controversy over whether the late payment surcharges on newly incurred taxes and fees also constitute bankruptcy expenses or common benefit debts. For example, in Case No. (2020) Xiang 10 Min Zhong 1585, the court only recognized the newly incurred taxes of the bankrupt enterprise as common benefit debts and did not define the late payment surcharges on the newly incurred taxes as common benefit debts, on the grounds that the late payment surcharges were not incurred for the benefit of all creditors but only for the benefit of tax authorities. In contrast, the Several Opinions on Further Solving Tax-related Issues in the Bankruptcy Process (Trial) issued by Shanwei City in 2023 clearly defines the late payment surcharges on newly incurred taxes and fees as bankruptcy expenses.

In terms of wording, Paragraph 2 only emphasizes "taxes and fees" and does not mention late payment surcharges, which may lead to two paths of understanding. First, it can be considered that the STA and the SPC have not defined the late payment surcharges on newly incurred taxes and fees as bankruptcy expenses or common benefit debts. Second, the STA and the SPC have not clearly regulated the nature of the late payment surcharges on newly incurred taxes and fees. Since the Announcement leaves a blank on this issue, it fails to effectively resolve such controversial issues in practice, and administrators still need to analyze and respond on a case-by-case basis.

Overview of Article 5 of the Announcement

There are two paragraphs, involving the principled provisions on tax credit restoration and tax deregistration respectively.

Key Points Interpretation

1. Regarding Tax Credit Restoration

Article 25 of the Measures for the Administration of Tax Payment Credit stipulates that "after an enterprise enters the bankruptcy reorganization or settlement process, if the enterprise or its administrator has legally paid taxes, fees, interest, late payment surcharges, and fines and corrected the relevant tax payment dishonesty behaviors, it may apply for tax credit restoration in accordance with the restoration standards applicable to bankruptcy reorganization enterprises." Paragraph 1 of Article 5 of the Announcement clarifies that even if a bankrupt enterprise has unresolved tax-related claims, it can still apply for tax credit restoration, and the subsequent tax credit evaluation will not be affected by the previous unresolved status. This is an important adjustment and supplement to the above provisions of the Measures and is beneficial to enterprises undergoing bankruptcy reorganization and settlement.

2. Regarding Tax Deregistration

In terms of tax deregistration of bankrupt enterprises, Article 16 of the Implementation Rules for the Tax Collection Administration Law stipulates that the prerequisite for tax deregistration is the settlement of all taxes, late payment surcharges, and fines, which is contradictory and conflicting with the Enterprise Bankruptcy Law. As early as 2019, the STA issued a document clarifying the contents stipulated in this Announcement, which was reaffirmed in Document Fa Gai Cai Jin Gui [2021] No. 274 issued in 2021. The provisions of Paragraph 2 of Article 5 of this Announcement continue the expressions and provisions of the above two documents without substantial changes. The purpose is to relieve the burden on bankrupt liquidation enterprises, realize the basic principle of separating the liabilities of the company and its shareholders, and smooth the investment exit channel.

Conclusion

The Announcement on tax and fee administration in bankruptcy jointly issued by the STA and the SPC is an important institutional achievement in deepening inter-departmental cooperation and resolving the difficulties in tax-related administration during bankruptcy. Based on practical needs, the Announcement clearly regulates the declaration of tax and fee claims, the cut-off date of tax claims, the repayment of newly incurred taxes, tax credit restoration, and tax deregistration. It not only integrates past provisions and practices but also further clarifies controversial issues, providing guidance for enterprises to exit the market in an orderly manner. At the same time, the Announcement still has some rule ambiguities and controversial points, such as the vague definition of the nature of education surcharges and local education surcharges as claims, the unclear ownership of late payment surcharges on newly incurred taxes and fees, and the lack of consequences for overdue supplementary declarations by tax authorities. These issues may still become the focus of disputes in practice and affect the overall effect of institutional implementation. Looking forward to the future, it is expected that the two departments will refine the rules by improving law enforcement standards and issuing typical cases. For all parties involved in bankruptcy practice, on the basis of accurately understanding the existing provisions, they should closely follow the dynamic development of relevant policies, actively negotiate within the framework of legality and compliance, and jointly promote the realization of efficiency and fairness in the bankruptcy process.