The Measures for the Determination of Illegal Income in Administrative Penalty Cases of Market Supervision and Administration was promulgated!

On January 16, the State Administration of Market Supervision and Administration issued the Measures for the Determination of Illegal Income in Administrative Penalty Cases of Market Supervision and Administration, which came into effect on March 20, 2026. Article

1 These Measures are formulated in accordance with the Administrative Punishment Law of the People's Republic of China in order to standardize the determination of illegal income in administrative penalty cases of market supervision and management, guarantee and supervise the implementation of administrative penalties by market supervision and management departments according to law, and protect the legitimate rights and interests of citizens, legal persons and other organizations. Article

2 These Measures shall apply to the determination of illegal gains by market supervision and management departments in handling administrative penalty cases. Article

3 The term "illegal gains" refers to the money obtained from the commission of an illegal act. The illegal income should be directly related to the illegal act committed by the party concerned, and it is the money directly obtained by the party concerned based on the illegal act. Article

4 The legitimate and necessary expenditures directly used by the parties for production and operation activities may be deducted when the illegal income is determined. Where there are other provisions in laws, administrative regulations and departmental rules, such provisions shall prevail. Article

5 When calculating the illegal income, the market supervision and management department may deduct the legitimate and necessary expenditures such as the purchase price of raw materials directly used for the production of commodities, the purchase price of commodities sold or used in services. If

the party concerned considers that there are other legitimate and necessary expenditures, it may apply to the market supervision and management department. Article

6 The parties concerned shall, within a reasonable time limit specified by the market supervision and management department, provide authentic and complete documents, agreements, accounting books and other evidentiary materials required to determine legitimate and necessary expenditures. The market supervision and management department shall determine the legitimate and necessary expenditure according to the materials provided by the parties concerned. The amount that the

party concerned fails to provide sufficient evidence to prove within the specified time limit, or the amount that the legitimate and necessary expenditure is confused with other expenditures and is difficult to distinguish, shall not be deducted. Article

7 For a price violation of overcharging or underpayment, the illegal income shall be calculated according to the overcharging or underpayment of the party concerned for the implementation of the act. Article

8 The illegal income from pyramid selling activities of pulling people's heads and defrauding entry fees shall be calculated according to the total income obtained by the parties in carrying out the pyramid selling activities. Article

9 Where a party violates the provisions of laws and regulations and provides convenient conditions for an illegal act, the illegal income shall be calculated according to the total income obtained by the party in carrying out the illegal act. Article

10 When determining illegal income, the directly related taxes paid by the parties concerned according to law before the administrative penalty is imposed by the market supervision and management department may be determined and deducted in accordance with the provisions of Article 6 of these Measures. Article

11 The market supervision and management department shall not confiscate the money that the parties have returned according to law, but shall include it in the illegal income. Article

12 The market supervision and management department may entrust a third-party organization with relevant business capabilities to carry out the accounting and evaluation of illegal income.

The entrusted third-party organization shall independently carry out relevant work and keep confidential the state secrets, business secrets and case information known in the work. Article

13 In the legal liability of the same law or administrative regulation in the field of market supervision and management, some provisions provide for the confiscation of illegal income, and some provisions do not provide for the confiscation of illegal income. The illegal acts involved in the provisions that do not provide for the confiscation of illegal income are generally regarded as illegal income without separate calculation. Article

14 After full investigation, if the amount of illegal income is still unable to be ascertained, the illegal income may not be calculated separately, but it shall be taken into account when determining the amount of fines. If the total illegal gains of the

party concerned cannot be accurately calculated, but part of the illegal gains can be determined, that part of the illegal gains may be determined as the illegal gains; the part that cannot be calculated shall be dealt with in accordance with the provisions of the preceding paragraph.

In the case of the circumstances specified in the preceding two paragraphs, it shall be submitted to the principal responsible person of the market supervision and management department for examination and approval. Article

15 If the market supervision and management department makes a decision not to impose administrative penalties in accordance with the provisions of Article 33, paragraph 1, of the Administrative Punishment Law of the People's Republic of China, the illegal income shall no longer be confiscated, but the party concerned shall not be exempted from the liability for compensation according to law.

Article 16 These Measures shall apply to the determination of illegal income by the drug regulatory department under the State Council and the drug regulatory department at the provincial level in handling administrative penalty cases. These Measures shall apply to organizations authorized by

laws and administrative regulations to perform the functions of market supervision and management in handling administrative penalty cases to determine illegal income. Article

17 These Measures shall come into force on March 20, 2026. The Measures for the Determination of Illegal Income in Administrative Penalty Cases of Administrative Authorities for Industry and Commerce promulgated by Decree No.37 of the former State Administration for Industry and Commerce on November 21, 2008 shall be abolished at the same time.