30.09.10 11:47 Age: 14 yrs

SAT Issues Tax Agent Firm Professional Risk Fund Measures

The State Administration of Taxation (SAT) has recently issued the Measures for Administration of Professional Risk Fund of Registered Tax Agent Firms to be effective as of 1 October 2010. The Measures require registered tax agent firms to allocate and use a professional Risk Fund in accordance with the provisions of the Measures, specifying that every registered tax agent firm shall, prior to the closure of each fiscal year, allocate a professional risk fund at a proportion of no less than 3% of its primary operating revenue of the year, and open a special account for the accounting of the fund, and, during the period of its continued existence, a registered tax agent firm shall ensure the balance of its professional risk fund is no less than 3% of the total sum of its primary operating revenue in the recent five years. If any registered tax agent firm causes the amount of the professional risk fund to be less than 3% of its primary operating revenue in the recent five years due to compensation, it shall, prior to the end of the fiscal year, make up the difference to ensure a sufficient amount in the fund.

 

“The Measures will be very helpful for Tax Agent Firms against professional risks and protective for their clients against losses” commented Scott Garner, Manager of Lehman, Lee & Xu Shanghai Office.