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1.2 Legislative Organs
China’s tax laws and policies are mainly formulated by these state organs:
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National People’s Congress (NPC) and its Standing Committee;
State Council;
Ministry of Finance (MOF);
State Administration of Taxation (SAT); and
General Administration of Customs (GAC).

The legislation of new tax laws in China follows five steps: proposal, drafting, examination, voting
and promulgation by the NPC Standing Committee. In China, the NPC and its Standing Committee
are the highest legislative organs and possess the power to formulate laws.
According to China’s Constitution, all laws passed by the NPC and its Standing Committee become
effective only after they have been signed by the Chairman of the country (presented as “Chairman
Order” by reference number), even though the Chairman does not actually have the power to veto
decisions.
Laws promulgated by the NPC are supplemented by detailed implementing regulations formulated
by the State Council -- the Chinese cabinet and the highest administrative organ empowered to
promulgate administrative regulations. As an example, China’s IIT Law is promulgated by the Standing
Committee of the NPC, while the Implementing Guidelines which regulate the specific enforcement
of the IIT Law are promulgated by the State Council.
The MOF, SAT and GAC are ministries/institutions subordinate to the State Council and are authorized
to issue tax announcements, circulars, and replies in order to supplement, interpret or clarify the
laws and regulations of the NPC and State Council.
In addition, some local tax regulations and rules may be promulgated by the local iterations of the
People’s Congress and government authorities at the provincial or municipal level, and are only
enforceable in certain regions.

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