To improve satisfaction among Advanced Certification Enterprises (AEO Enterprises in China), the General Administration of Customs (GACC) has recently clarified the extension of the time limit for AEO enterprises to make voluntary disclosures without facing administrative penalties.
On October 8, 2023, the General Administration of Customs of China (GACC) issued GACC Announcement [2023] No. 127. This Announcement clarified how to handle violations of Customs regulations that enterprises voluntarily disclose and correct before Customs identifies them.
On April 6, 2024, the GACC released Shujifa [2024] No. 36, which extended the time limit for voluntary disclosure by Authorized Economic Operators (AEO) without imposing administrative penalties. However, some aspects remained unclear.
In response, on July 22, 2024, the GACC released the GACC Announcement [2024] No. 87 to clarify the extended time limit for AEO enterprises.
The following table outlines some of the critical changes to the new policy.
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Requirements of Exemption from Administrative Penalties |
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Scenario #1 |
Within six months from the date of tax-related violations |
Customs recognizes the enterprise as having made a voluntary disclosure |
Within one year from the date of tax-related violations |
Within one year from the date of tax-related violations |
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Scenario #2 |
More than six months but less than two years from the date of tax-related violations |
Voluntary disclosure of the omission or underpayment of tax, which accounts for less than 30% of the tax payable, or is less than one million RMB |
(not clarified) |
More than one year but less than two years from the date of tax-related violations
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Voluntary disclosure of the violation, which affects export VAT refund management, and of which the excessive refund amount is less than 30% of the refundable amount or less than one million RMB |
Considering the benefits mentioned above, Tradewin recommends the following:
- If your company is not currently an AEO enterprise, we recommend you actively apply. With more favorable policies for AEO enterprises emerging, these enterprises need to apply for or maintain their AEO status. Remember, Tradewin is here to support you through related AEO application services and assure you that you're not alone in this process.
- Announcement No. 87 of 2024 extends the deadline for AEO enterprises to make voluntary disclosures without facing administrative penalties, changing the period from six months to one year. This adjustment better aligns with annual internal audit practices and encourages companies to correct mistakes and comply with regulations proactively. We recommend regularly conducting Customs and Trade Compliance Health Checks on your import and export activities. This action will help you promptly identify any issues and make voluntary disclosures within the designated timeframe. Tradewin is available to provide related services.
- When making voluntary disclosures, it is crucial to provide Customs with complete and detailed information. Providing this information helps prevent potential compliance issues arising from inaccurate or incomplete information during the disclosure process, which could lead to Customs audits and put your company at a disadvantage. Therefore, we recommend engaging a professional third-party firm for assistance.
By being responsible and proactive in your disclosures, you can avoid potential problems and maintain a strong position. If your company requires support with filing voluntary disclosures or achieving AEO status, please contact Tradewin's professional consultants anytime.
