As everyone in Beijing knows, it is nearly impossible to switch appointed tax officesacross districts. This is because of the conflict of interest between the districts over tax income, taxation target being the top priority for governors. It becomes an indirect effect for tax payers in some circumstances.

One of our clients, a world famous architecture design firm, moved their office from the Chaoyang district to Dongcheng – the building they moved into being the first work their firm took in Beijing: the remarkable landmark on East 2nd ring road. Before the move, we reminded them of the difficulties that may occur but since the building had such a significant meaning to them, they moved in anyway in October 2014.

After then the registered address change was going well and all licenses had changed to the new address. Only the appointed tax office remained the same because the address changing agent intelligently left the appointed tax office change out of the agreement. Then, our client hired another agent for the job, their contract stating they won’t charge fees if the mission failed. Two months later they refund the 50% upfront fees but fortunately the business isn’t affected by this.

In Feb 2015, our client’s income exceeded the ¥5M threshold and they upgraded from 3% small scale tax payer to 6% general tax payer. That’s when the problems came to light.

Their Chaoyang tax officer told them that they couldn’t order a Fapiao because their business license and tax certificate indicated their Dongcheng address, which would show on the Fapiao, but the Fapiao issuer is Chaoyang, making it impossible to issue it. If the appointed tax office wouldn’t change that meant our client wouldn’t be able issue Fapiaos to their clients and the business would terminate. Our office stepped in and took on the job of making the change happen.

On May8th, after thousands of phone calls and multiple visits, the application forms were submitted to the tax office branch eventually. According to the tax inspector, the case would be reviewed by Chaoyang tax bureau. It couldn’t be expected very soon to finish.  Four weeks later, there was still nothing.

My colleague asked our inspector and the office head in the tax branch and he said we’d have to consult the Chaoyang tax bureau. There was nothing we could do but wait.

On June 4th I wrote a letter to tax bureau chief via Wechat (Thanks internet). The next dayI received a phone call from the bureau chief office and he told me they were looking into this case.

On June 9th I went to the Beijing tax bureau, but the staff there told me I came to the wrong place: Our case was handled by the Chaoyang tax bureau, not the Beijing tax bureau. But they were kind enough to tell me the contact from that bureau. One hour later, I was standing by an officer who dealt with our case in the Chaoyang tax bureau and he told me that our client was on the Beijing Development and Reform Commission list. The tax payers on this list are all applying for appointed tax office changes, but the tax they paid in 2014 exceeds some amount and they are not allowed to switch to other district.

They gave me the contact from Beijing Development and Reform Commission and I called them on June9th. The officer explained the conflict of interest between Chaoyang and Dongcheng to me and mentioned that he is aware of the Fapiao matter. If the appointed tax office didn’t change, there would be losses for both sides. He guaranteed me he would report to his supervisor about our situation. June 10th, nothing. Then, on June 11th, I received an email from bureau chief office saying the matter was solved and we could finally move the tax office.

We haven’t heard from our tax office until today, but what can I say? I’ve never seen a successful future that’s had an easy past. When it comes to the national interest, local protection is second place.