In today’s business environment, your tax credit rating is no longer just a number for the tax authorities. It directly affects:
1. Bank loans (especially collateral-free “silver-tax” loans)
2. Export tax rebates
3. Applications for additional VAT invoices
A low rating — particularly C or D — can block access to these critical services. And once you get a D, moving back up takes time.
🚨 When Will a Company Be Automatically Rated “D”?
According to China’s State Taxation Administration Announcement No. 40 (2014), a company will be directly rated D in any of the following cases.
Items 8 and 9 are especially worth noting:
1. Tax evasion, avoidance of tax collection, export tax fraud, or issuing false VAT invoices – if a criminal conviction is obtained.
2. Same behaviors as above, even without a criminal conviction, if:
2.1. Evaded tax ≥ RMB 100,000 and ≥10% of total taxes payable, or
2.2. Other serious violations (even if taxes and penalties are later paid).
3. Failure to pay taxes, late fees, or penalties as required by the tax authority’s decision.
4. Refusing to pay taxes through violence or threats, or obstructing tax audits.
5. Violating VAT or other invoice rules, causing another entity or individual to underpay or evade taxes.
6. Obtaining tax benefits using false application materials.
7. Defrauding export tax rebates – and the suspension period for rebates has not yet ended.
8. Having a record as a “non-compliant taxpayer” , or being registered/operated by the responsible person of such an entity.
9. Being registered/operated by the responsible person of a D-rated taxpayer.
10.Other serious violations determined by the tax authorities.
📉 Even Without the Above – A Score Below 40 = D
Even if none of the above apply, your company will be rated D if its annual evaluation score falls below 40 points.
These points are deducted for everyday compliance issues — many of which are easy to avoid but often overlooked, especially in smaller businesses with frequent finance or tax staff turnover:
1. Late tax filings
2. Missing financial statement submissions
3. Issues with tax control devices
4. Failure to synchronize changes with the tax bureau (e.g., business registration updates)
✅ Takeaway for Business Owners
Tax credit rating is not just about compliance — it’s about access to financing, rebates, and growth tools.
For multinational or foreign-managed companies in China, assigning clear responsibility for daily tax compliance and monitoring your annual rating is essential.
Don’t wait for a D to act — by then, the damage is already done.
