中华人民共和国增值税暂行条例实施细则

Detailed Rules and Regulations for the Implementation of the Provisional Regulations
of the Peples Republic of China on Value-Added Tax


Article 1
These Detailed Rules are formulated in accordance
with the stipulations of Article 28 of the sional Regulations of the Peple"s Republic of Chin
a on Value-Added Tax > (hereinafter referred to as
"the Regulations").

Article 2
"Goods as mentioned in Article 1 of the Regulation
s to tangible moveable goods, including electricit
y, heat, and gas.

"Processing" as mentioned in Article 1 of the Regu
lations refers to the business of contractind to p
rocess goods, where the contractor supplies the ra
w material and major materials and the suncontract
or manufactures the goods in accordance with the r
-equirements of the contractor and receives a proc
essing fee.

"Repairs and replacement" as mentioned in Article
1 of the Regulations refers to the business of con
tracting to carry out repairs of damaged or malfum
ctioned goods, so as to restore the goods to their
original conditions and functions.

Article 3
"Sales of goods" as mentioned in Article 1 of the
Regulations refers to the transfer of the ownerahi
p of goods for any consideration.

"Provision of processing, repairs and replacement
services" as mentioned in Article 1 of the Regulat
ions refers to the provision of processing , repai
rs and replacement services for any consideration.
However the provision of processing, repairs and
replacement services by the staff employed by the
units or individual business operators for their u
nits or employers shall not be included.

"Consederation" as mentioned in these Detailed Rul
-es includes money, goods or any economic benefit
obtained from the purchasers.

Article 4
The following activities of units or individual op
erators shall be deemed as sales of goods:

(1)Consignment of goods to other for sale;

(2)Sale of goods under consignment;

(3)Transfer of goods from one establishment to oth
-er establishments for sale by a taxpayer that mai
ntains two or more establishments amd adopts conso
lidated accounting, unless the relevant establishm
ents are maintained in the same county (or city );

(4)Application of self-produced or processed goods
to produce non-taxable items;

(5)Provision of self-produced, processed or purcha
sed goods to other units or individual operators a
-s investments;

(6)Distribution of self-produced, processed or pur
chased goods to shareholders or investors;

(7)Use of self-produced or processed goods for col
lective welfare or personal or investors;

(8)Giving out self-produced, processed or purchase
-d goods to others as free gifts.

Article 5
Asales activity that involves goods and non-taxabl
e services shall be a mixed sales activiry. Mixed
sales activities of enterprises, enterprise units
or individual business operators engaged in produc
tion, wholesaling or retailing of goods shall be r
egarded as sales of goods which shall be subject t
-o VAT. Mixed sales activities of other units or i
ndividuals shall be regarded as sales of non-taxab
le services which shall not be subjict to VAT.

Whether a taxpayer"s sales activity is a a mixed s
ales activity shall be determined by the tax colle
-cting authorities under the State Administration
of Taxation.

"Non-taxable services" as mentioned in the first p
aragraph of this Article refers to the services su
bjectn to Business Tax within the scope of the tax
-able items of communiations and transportation, c
-onstruction, finance amd insurance, posts and tel
-ecommunications, culture and sports, entertainmen
-t, and service industries.

"Enterprises, enterprise units or individual busin
ess operators engaged in production, wholesaling o
r retailing of goods" as mentioned in the first pa
ragraph of this Article includes enterprises, ente
rprise units, and individual business operators pr
-incipally engaged in the production, wholesaling
or retailing of goods and also engaged in non-taxa
-ble services.

Article 6
Taxpayers also engaged in non-taxable services sha
ll account separately for the sales amount of good
s and taxable services and non-taxable services. W
-ithout separate accounting or where accurate acco
-unting cannot be made, the non-taxable services a
nd goods and taxable services shall together be su
bject to VAT.

Whether non-taxable services so engaged by the tax
able shall be subject to VAT shall be determined b
y the tax collecting authorities under the State A
-dministration of Taxation.

Article 7
"Sales of goods within the territory of the People
"s Ripublie of China" (hereinafter referred to as
the location of the goods sold is within the terri
tory.

"Sales of taxable services in the territory" as me
ntioned in Article 1 of the Regulations refers to
the sales of taxable services that takes place wit
hin the territory.

Article 8
"Units" as mentioned in Article 1 of the Regulatio
ns refers to State-owned enterprises, collectively
-owned enterprises, privately-owmed enterprises, j
-oint-stock enterprises, other enterprises, admini
strative units, institutions, military units, soci
al organizations amd other units.

"Individuals" as mentioned in Article 1 of the Reg
ulations refers to individual business operators a
nd other individuals.

Article 9
For enterprises which lease or contract to others
for management, the lessees or the sub-contractors
shall be the taxpayers.


Article 10
Taxpayers selling goods or taxable services with d
ifferent tax rates and also engahed in non-taxable
services which shall be subject to VAT, the highe
st of the tax rates on goods or taxable services s
hall apply to the non taxable services.

Article 11
For taxpayers other than small-scale taxpayers (he
reinafter rejerred to as "general taxpayers"), the
VAT refundable to purchasers due to returns inward
or discount allowed shall be deducted from the out
-put tax for the period in which the returns inwar
d or discount allowed takes place. The VAT recover
ed due to the returns outward or discount received
shall be deduted from the input tax for the perio
-d in which the returns outward or discount receiv
-ed takes place.

Article 12
"Other charges" as mentioned in Article 6 of the R
-egulations refers to handling fees, subsidies, fu
-nds, fund raising fees, profits sharing, incentiv
e bonus, damages on breach of contract (interest o
n deferred payments ), packaging charges, rentals
on packaging materials, contingency charges, puali
ty charges, freight and loading and unloading char
ges, commissioned receipts, commissioned payments
and charges of any other nature which is in additi
on to the price charged to the purchaser. The foll
-owing items nevertheless shall not be included:

(1)Output VAT collected from purchasers;

(2)Consumption Tax withheld on processing of consu
mer goods subjict to Consumption Tax;

(3)Disbursement of freight charges that satisfies
both the following conditons:

1.A fteight invoice of transportation department w
as issued to the purchaser; and

2.The same invoice is turned over by the taxpayer
to the purchaser.

All other charges, regardless of the accounting tr
eatment under the accounting system adopted, shall
be included in the sales amount in computing the t
ax payable.

Article 13
Where the taxpayer is engaged in mixed sales activ
ities and the non-taxable services that are subjec
t to VAT in accordance with Article 5 and Article
6 of these Detailed Rules, his sales amount shall
be respectively the sum the his sales amounts of g
oods and non-taxable services, or the sum of the s
ales amounts of goods or taxable services and the
non-taxable services.

Article 14
For general taxpayers selling goods or taxable ser
vices that adopt the pricing method od combining t
he sales amount and the output tax, the sales amou
nt shall be computed according to the following fo
-rmula:
Sales amount including tax
Sales amount = ????????????
1 + tax rate

Article 15
Pursuant to the stipulations of Article 6 of the R
egulations, if a taxpayer sittles settles the sale
s amount in foreign exchange, the Renminbi convers
ion rate for the sales amount to be selected can b
e the foreign exchange rate quoted by the State (t
he average rate in Principle ) prevailing on the d
ate or that on the first day of the month in which
the sales take place. Taxpayers shall determine i
n advance the conversion rate to be adopted. Once
determined, no change is allowed within 1 year.

Article 16
For taxpayers whose prices are obviously low and w
ithout proper justification as mentioned in Articl
e 7 of the Regulations, or have activities of sell
ing goods as listed in Article 4 of these Detailed
Rules but without invoiced sales amounts, the sal
es amount shall be determined according to the fol
lowing sequence:

(1)Determined according to the average selling pri
ce of the taxpayer on the same goods in the same m
-onth;

(2)Determined according to the average selling pri
-ce of the taxpayer on the same goods in the recen
t period;

(3)Determined according to the composite assessabl
e value. The fotmula of the composite assessable v
-alue shall be:

Composite assessable Value = Cost * (1 + cost
plus margin)

For goods subject to Consumption Tax, the composit
e assessable value shall include Consumption Tax p
-ayable.

"Cost" in the formula refers to the actual costs o
f products sold for sales of self-produced goods;
and the actual costs of purchases for sales of pur
chased goods. The rate of cost-plus marhin in the
formula shall be determined by the State Administr
ation of Taxation.

Article 17
The "Purchase price" as mentioned in Paragraph 3,
Article 8 of the Regulations includes the price pa
id by taxpayers to agricultural producers for purc
hasing tax-exempt agricultural products and the Ag
-ricultural Special Product Tax withheld accoring
to the regulations.

The "price paid" as mentioned in the preceding par
aguaph refers to the price specified on the purcha
sing voucher approved for use by the competent tax
authorities.

Article 18
For mixed sales activities and non-taxable service
s which are subject to VAT according to the stipul
ations of Article 5 and Article 6 of these Detaile
d Rules, the input tax on goods purchased for use
in the non-taxable services involved in the mixed
sales activities or in the non-taxable services th
at satisfies the stipulations of Article 8 of the
Regulations is allowed to be credited from the out
put tax.

Article 19
"Fixed assets" as mentioned in Article 10 of the R
-egulations refers to:

(1)Machinery, mechanical apparatus, means of trans
port, and other equipment, tools and apparatus rel
ated to production or business operations with a u
seful life of more than one year;

(2)Article that are not the main equipment for pro
duction or business operations but with a unit val
ue of more than 2,000 yuan and a useful life of mo
re than two yers.

Article 20
"Non-taxable items" as mentioned in Article 10 of
the Regulations refers to the provision of non-tax
able services, the transfer of intangible assets,
the sales of immovanle properties and fixed assets
under construction, etc.

The construction, re-construction, expansion, repa
iring and decoration of buildings by the taxpayer
regardless of the accounting treatment under the a
ccounting system adopted, shall be included in the
"fixed assets under construction" as mentioned in
the proceeding paragraph.

Article 21
"Abnormal losses" as mentioned in Article 10 of th
e Regulations refer to losses other than the norma
l wear and tear in the course of production or bus
-iness operations. They include:

(1)Losses due to natural disasters;

(2)Losses due to theft, spoilage or deterioation,
etc., resulting from improper management;

(3)Other abnormal losses.

Article 22
Where input tax has already been claimed on goods
purchased or taxable services under the circumstan
ces listed in Paragraphs (2) to (6) in Article 10
of the Regulations, the input tax of these goods p
urchased or taxable services shall be deducted fro
m the input tax of that period. If that input tax
cannot be determined accurately, the input tax to
be deducted shall be computed based on the actual
costs of that period.

Article 23
For taxpayers engaged in tax-exempt items or non-t
axable items (not including fixed assets under con
struction ) and where the input tax cannot be dete
rmined accurately, the non-creditable input tax sh
all be computed according to the following formula
:
Sum of the sales amou
-nts of tax-exempt it
Total -ems and turnover of
Non-creditable input tax non-taxable items of
input tax = of the * the month
month ???????????
Sum of the total sale
-s amount and turnove
-r of the month

Article 24
The standards for small-scale taxpayers as mention
ed in Article 11 of the Regulations are as follows
:
(1)Taxpayers engaged in the production of goods or
the provision of taxable services, and taxpayers
engaged principally in the production of goods or
provision of taxable services but also in wholesal
ing or retailing of goods , the annual sales amoun
t of which subject to VAT (hereinafter referred to
as "taxable sales amount ") is below 1 million yu
an;

(2)Taxpayers engaged in wholesaling or retailing o
f goods, the annual taxable sales amount of which
is below 1.8 million yuan.

Regardless whether the annual taxable sales amount
s exceed the standards for small-scale taxpayers,
individuals, non-enterprise units, and enterprises
which do not often have taxable activities, are c
-hargeable as small-scale taxpayers.

Article 25
The sales amount of small-scale taxpayers does not
include the tax payable .

For small-scale taxpayers selling goods or providi
ng taxable services that adopt the method of setti
ng prices by combining the sales amount and the ta
x payable, the sales amount is computed according
to the following formula:
Sales amount including tax
Sales amount = ?????????????
1 + Assessable rate

Article 26
For small-scale taxpayers, the sales amount refund
ed to the purchasers due to returns inward or disc
ount allowed shall be deducted from the sales amou
nt for the period in which the returns inward or d
-iscount allowed occurs.

Article 27
"Sound accounting " as stated in Article 14 of the
Regulations refers to the capability of accurately
accounting for the output tax, input tax and tax p
ayable in accordance with the accounting regulatio
ns and the requirements of the tax authorities.

Article 28
Individual operators that satisfy the conditions a
-s prescribed in Article 14 of the Regulations and
after the approval of the bureaux directly under t
-he State Administration of Taxation can be confir
-med as general taxpayers.

Article 29
Once the small-scale taxpayers have been confirmed
as general taxpayers, they cannot be reclassified
as small-scale taxpayers.

Article 30
General taxpayers in any of the following circumst
ances shall compute the tax payable based on the s
ales amount and according to the VAT rates, but no
input tax can be credited and special VAT invoice
s shall not be used:

(1)The accounting system is unsound or cannot prov
ide accurate tax information;

(2)The conditions of general taxpayers are satisfi
ed but the taxpayer has not applied or processed t
he comfirmation procedures as general taxpayers.

Article 31
The scope of part of the tax-exempt items listed i
n Article 16 of the Regulations are prescribed as
follows:

(1)"Agricultural" as mentioned in Item (1) of Para
-graph (1) refers to planting, breeding, forestry,
animal husbandry and aquatic products industry.

"Agricultural producers" includes units and indivi
duals engaged in agricultural production.

"Agricultural producers" refers to primary ahricul
tural products. The detailed scope of thes definit
ion shall be determined by the taxation bureaux di
-rectly under the State Administration of Taxation
.

(2)"Antique books" as mentioned in Item (3) of Par
-agraph (1) refers to the ancient books and old bo
-oks purchased from the public.

(3)"Articles" as mentioned in Item (8) of Paragrap
-h (1) refers to goods other than yachts, motorcyc
-les, and motor vehicles that are subject to Consu
-mption Tax.

"Articles which have been used" refers to goods th
-at have been used by " other individuals" as ment
ioned on Article 8 of these Detailed Rules.

Article 32
The scope of application of "VAT minimum threshold
" as mentioned in Article 18 of the Regulations is
limited to individuals.

The range of the VAT minimum threshold are stipula
ted as follows:

(1)The minimum threshold for sales of goods shall
be monthly sales amount of 600 to 2,000 yuan.

(2)The minimum threshold for sales of taxable serv
ices shall be monthly sales amount of 200 to 800
yuan.

(3)The minimum threshold for assessment on a trans
action-by-transaction basis shall be sales amound
per transaction (or per day) of 50 to 80 yuan.

"Sales amount" as mentioned in the preceding parag
raph refers to the "sales amount of small-scale ta
xpayers" as mentioned in the first paragraph of Ar
-ticle 25 of these Detailed Rules.

The bureaux directly under the State Administratio
n of Taxation shall determine the minimum threshol
-d locally applicable within the prescribed range
and in accordance with the actual conditions, and
shall report these amounts to the State Administra
tion of Taxation for their records.

Article 33
The timing at which the tax liability arises on th
e sales of goods or taxabie services as prescribed
in Item (1), Article 19 of the Regulations is spe
cified according to the different methods of settl
ement as follows:

(1)For sales of goods under the direct payment met
hod, it shall be the date on which the sales sun i
s received or the documented evidence of the right
to collect the sales sum is obtained, and the bil
ls of lading are delivered to purchasers, regardle
ss whether the goods are delivered;

(2)For sales of goods where the sales amount is en
trusted for collection, including where entrusted
to banks for collection, it shall be the date on w
hich the goods are delivered and the procedures fo
r entrusted collection are completed;

(3)For sales of goods on credit or receipt by inst
allments, it shall be the date of collection agree
d according to the contracts;

(4)For sales of goods with payment received in adv
ance, it shall be the date on which the goods are
delivered;

(5)For sales of goods on a consignment to other ta
xpayers, it shall be the date on which the detaile
d account of consignment sales are received from t
-he consignee;

(6)For sales of taxable services, it shall be the
date on which the services are provided and the sa
les sum is received or the documented evidence of
the right to collect the sales sum is obtained;

(7)For taxpayers that have the activities that are
considered as sales of goods as listed from Item
(3) to Item (8) in Article 4 of these Detailed Rul
es, it shall be the date on which the goods are tr
ansferred.

Article 34
For overseas units or individuals selling taxable
services within the territory but have not set up
any business establishment within the territory, t
he agents shall be the withholding agents for thei
r tax payable. If there are no agints, the purchas
er shall be the withholding agint.

Article 35
For business without a fixed base selling goods or
taxable services in a different county (or city )
and have not reported and paid tax with the compet
int tax authorities where the sales take place, th
e competent tax authorities of the location where
the establishments are located or where the indivi
dual resides shall collect the overdue tax.

Article 36
"Tax authorities" as mentioned in Article 20 of th
e Regulations is the State Administration of Taxat
ion, and the collecing authorities thereunder.

"The competent tax authorities" and "the collectin
g authorities" as mentioned in the Regulations and
these Detailed Rules refer to branches offices un
der the State Administration of Taxation at county
level and above.

Article 37
"Above" and "Below" as mentioned in these Detailed
Rules also include the figure or the level itself
.

Article 38
These Detailed Rules shall be interpreted by the M
-inistry of Finance or by the State Administration
of Taxation.

Article 39
These Detailed rules shall be implemented on the d
-ate the Regulations come into effect, The < Detai
led Rules and Regulations for the Implementation o
f the Draft Regulations of the People's Republic o
-f China on Value-Added Tax > and the < Detailed R
-ules and Regulations for the Implementation of th
e Draft Regulations of the People's Republic of Ch
-ina on Product Tax > promulgated by the Ministry
of Finance on September 28, 1984 shall be repealed
on the same date.