The State Administration of Taxation (SAT) released the Administrative Measures on the Thousand Groups List (the “List”) (the SAT Public Notice  No.7, PN 7), which clarifies the administrative matters for the List for the first time, including the applicable scope, relevant work procedures in determining the list, major roles and responsibilities of the tax authorities and enterprises in the Thousand Groups etc. PN 7 shall take effect from 1 May 2017. Meanwhile, as the SAT has expanded its administration scope of Large Business Enterprises (LBE) from 45 target entities to the Thousand Groups, the Administrative Measures on the List of LBEs Directly Managed by the SAT (the SAT Public Notice  No.18) will be abolished at the same time.
At the end of 2016, the SAT released the Public Notice Regulating Financial Accounting Statements that Accompanied the CIT Returns Filed by the Thousand Groups and Enterprises within These Groups (the SAT Public Notice  No.67 or “PN 67”), which specifies the regulation on information reporting. The release of PN 7 further clarifies the administrative rules of the List and establishes a solid foundation for improving administration and service by facilitating the tax authorities to precisely identify their LBE targets, which will have huge impact on those entities on the List. In this issue of News Flash, we will introduce the specific regulations for the List administration, look ahead to the future development of LBE management, as well as provide our observations and insights to facilitate taxpayer’s new move.