China’s customs relaxes voluntary disclosure rules

China’s customs has relaxed the rules for the voluntary disclosure of breaches in customs matters through a recently released circular, GAC Notice [2022] No.54 (Notice 54). This relaxation is valid for a limited period of time from 1 July 2022 to 31 December 2023.

Voluntary disclosure refers to the self-initiated disclosure of breaches by importers/ exporters, and is intended for China’s customs to make lenient treatments, especially for exempting or reducing administrative penalties. In principle, voluntary disclosure does not apply to cases already known to the customs prior to the voluntary disclosure.

China’s customs first explained voluntary disclosure in principle in 2016, and then in more detail in 2019 via a rule GAC Notice [2019] No. 161 (Notice 161) on the conditions for a waiver of administrative penalties. The latest changes made by circular Notice 54 are highlighted below.

As shown above, these relaxed conditions offer more benefits/lenient treatment to taxpayers. More filing locations also help facilitate the reporting. However, the short period of validity (of eighteen months) also implies that the concession is temporary. Companies should consider their need for an internal audit and voluntary disclosure before 31 December 2023.

Read the WTS Global Customs Newsletter here.