China’s State Taxation Administration has issued new nationwide benchmarks for discretionary tax administrative penalties, standardising penalty application and strengthening taxpayer procedural protections from 1 November 2026.
China’s State Taxation Administration (STA) has released the National Tax Administrative Penalty Discretionary Benchmark (2026 Edition) through Announcement No. 20 of 2026 on 28 September 2026. The new standards set uniform guidelines for how tax authorities impose administrative penalties across China’s regions.
Legal foundation and scope
The discretionary benchmark draws from several core laws: the Administrative Penalty Law, the Tax Collection Law and its implementing regulations, the Social Insurance Law, and the Measures for Invoice Administration. Tax authorities must now impose penalties within these standardised limits and must specify in their penalty decisions how the benchmark applies. Citing the benchmark alone is not a sufficient basis for a penalty decision.
Rules for applying penalties
Tax authorities follow the Rules for the Exercise of Discretionary Power in Tax Administrative Penalties, originally issued as Announcement No. 78 of 2016 and amended through Announcement No. 31 of 2018. Under these rules, three scenarios allow departures from standard penalties.
Minor violations listed in the official minor-items list can result in no penalty if the violation was corrected promptly and caused no harm. When legal grounds exist for leniency or mitigation, authorities must apply those reductions. Complex cases involving heavy penalties, widespread impact, or proposed penalty reductions go through collective deliberation before final decisions.
Taxpayer protections
Tax authorities must inform taxpayers of their rights to request recusal of officials, submit statements and defences, and demand hearings. These obligations apply whenever penalties are exercised.
The announcement takes effect on 1 November 2026.
