中华人民共和国增值税暂行条例

Provisional Regulations of the Peoples Republic of China on Value-Added Tax


Article 1
All units and individuals engaged in the sales of goods, provision of processing, r
epairs and replacement services, and the importation of goods withi-n the territory
of the People"s Republic of China are taxpayers of Value-Added Tax (heteinafter r
eferred to as "taxpayers"),and shall pay VAT in accordance with these Regulations
.

Article 2
VAT rates:
(1)For taxpayers selling or importing goods, other than those stipulated in items
(2) and (3) of this Article, the tax rate shall be 17%.
(2)For taxpayers selling or importing the followin-g goods, the tax rate shall be
13%:

i.Food grains, edible vegetable oils;ii. Tap water, heating, air conditioning,
hot water, coal gas, lipuefied petroleum gas, naturalgas,
methane gas, coal/charcoal products for household
use;
iii. Books, newspapers, magazines;
iv. Feeds, chemical fertilizers, agricultural chem
icals, agricultural machinery and covering plastic
-film for farming;
v. Other goods as regulated by the State Council.

(3)For taxpayers exporting goods, the tax rate shall be 0%, except as otherwise
stipulated by the State Council.

(4)For taxpayer providung processing, repairs and replacement services (hereimaft
er referred to as"t-axables services"), the tax rate shall be 17%.

Any adjustments to the tax rates shall be determined by the State Council.

Article 3
For taxpayers dealing in goods or providing taxable services with different tax rates
shall be accounted for separately. If the sales amounts have n
ot been accounted for separately, the higher tax r
-ats shall apply.

Article 4
Except as stipuated in Article 13 of these Regulat
-ions, for taxpayers engaged in the sales of goods
or the provision of taxable services (hereinfter
referred to as "selling goods or taxable services"
), the tax payable shall be the balance of output
tax for the period after deducting the input tax f
or the period. The formula for computing the tax p
-ayable is as follows:

Tax payable=Output tax payable for the period-Inpu
-t tax for the period

If the output tax for the period is less than and
insufficient to offset against the input tax for t
-he period, the excess input tax can be carried fo
rword for set-off in the following periods.

Article 5
For taxpayers selling goods or taxable services, t
he output tax shall be the VAT payable calculated
based on the sales amounts and the tax rates presc
ribed in Article 2 of these Regulations and collec
ted from the purchasers, The formula for computing
the output tax is as follows:

Output tax=Sales amount*Tax rate

Article 6
The sales amount shall be the total consideration
and all other charges receivable from the purchase
rs by the taxpayer selling goods or taxable servic
-es, but excluding the output tax collectible,

The sales amount shall be computed in renminbi. Th
-e sales amoumnt of the taxpayer settled in foreig
n currencies shall be converted into renminbi acco
rding to the exchange rate prevailing in the forei
gn exchamge market.

Article 7
Where the price used by the taxpayer in selling go
ods or taxable services is obviously low and witho
ut proper justification , the sales amount shall b
e determined by the competent tax authorities.

Article 8
For taxpayers who purchase goods or receive taxabl
e services (hereibafter referred to as "purchasing
goods or taxable services"), VAT paid or borne sh
all be the input tax.

The amout of input tax that can be credited agains
t the output tax, other than the situations specif
ied in Paragraph 3 of this Article, shall be restr
icted to the amount of VAT payable as indicated on
the following VAT credit document:

(1)VAT indicated in the special VAT invoices obtai
-ned from the sellers;

(2)VAT indicated on the payment receipts obtained
from the customs office.

The cteditable input tax for the purchasing of tax
exempt agricultural products is calculated based
on adeemed deduction rate at 10% on the actual pur
chasing price. The formula for calculating the inp
-ut tax is as follows:
Input tax = Purchasing price * Deduction rate

Article 9
Where taxpayers purchasing goods or taxable servic
es have not obtained and kept the VAT ctedit docum
ent in accordance with the regulations, or the VAT
payable and other relevant items in accordance wit
h the regulations are not indicated on the VAT cre
dit document, no input tax shall be ctedited again
st the output tax.

Article 10
Input tax on following items shall not be credited
against the output tax:

(1)Fixed assets purchased;
(2)Goods purchased or taxable services used for no
-n-taxanle items;
(3)Goods purchased or taxable services used for gr
-oup welfare or personal consumption;
(4)Goods purchased or taxable services used for gr
oup welfare or personal consumption;
(5)Abnormal losses of Goods purchased;
(6)Goods purchased or taxable services consumed in
the production of work-in-progress or finished goo
ds which suffer abnormal losses.

Article 11
Small-scale taxpayers engaged in selling goods or
taxable services shall use a simplified method for
calculating the tax payable.

The ctiteria for small-scale taxpayers sell be reg
-ulated by the Ministry of Finance.

Articke 12
The rate leviable on the small-scale taxpayers goo
ds or taxable services shall be 6%.

Any adjustment to the leviable rate shall be deter
mined by the State Council.

Anticle 13
For small-scale taxpayers selling goods or taxable
services, the tax payable shall be calculated bas
ed on the sales amount and the leviable rate presc
ribed on Article 12 of these Regulations. No input
tax shall be creditable.The formula for calculati
ng the tax payable is as follows:
Tax payable = Sales amount * leviable rate.

The sales amount shall be determined on accordance
with the stipulations of Article 6 and Article 7
of these Regulations.

Article 14
Small-scale taxpayers with sound accounting who ca
-n provide accurate taxation information may,upon
the approval of the competent tax authorities, not
be treated as small-scale taxpayers, The tax paya
ble shall be conmputed pursuant to the relevant st
-ipulations of these Regulations.

Article 15
For taxpayers importing goods, tax payable shall b
e computed based on the composite assessable price
and the tax rates prescribed in Article 2 of thes
e Regulatoins. No tax will be credited. The formul
as for computing the composite assessable price an
d the tax payable are as follows:

Composite assessable price = Customs dutiable
value + Customs Duty + Consumption Tax
Tax payable = Composite assessable price * Tax
rate

Article 16
The following items shall be exempt from VAT:

(1)Self-produced agricultural products sold by agr
icultural producers;
(2)Contraceptive medicines and deviced;
(3)Antique books;
(4)Importation of instruments and equipment direct
ly used in scientific research, experiment and edu
cation;
(5)Importation of materials and equipment from for
eign goverments and international organizations as
assistance free of charge;
(6)Equipment and machenery required to be imported
under contract processing, contract assembly and
compensation trade;
(7)Articles imported directly by organizations for
the disabled for special use by the disabled;
(8)Sale of goods which have been used by the selle
rs.

Excipt as stipulated in the above paragrph, the VA
-T exemption and reduction items shall be regulate
d by the State Council. Local governments or depar
tments shall not regulate any tax exemption or red
uction items,

Article 17
For taxpayers engaged in tax exempt or tax reduced
items, the sales amounts for tax exempt or tax red
uced items shall be accounted for separately, If t
he sales amounts have not been separately accounte
d for, no exemption or reduction is allowed.

Article 18
For taxpayers whose sales amounts have not reached
the VAT minimum threshold stipulated by the Minist
ry of Finance, the VAT shall be sxempt.

Article 19
The time at which a liability to VAT arises is as
follows:

(1)For sales of goods or taxable services, it is t
he date on which the sales sum is received or the
documented evidence of right to collect the sales
sum is obtained.
(2)For importation of goods, it is the date of imp
-ort declaration.

Article 20
VAT shall be collected by the tax authorities.VAT
on the importation of goods shall be collected by
the customs office on behalf of the tax authoritie
-s.

VAT on self-used articles brought or mailed into C
-hina by individuals shall be levied together with
Customs Duty. The detailed measures shall be form
-ulated by the Tariff Policy Committee of the Stat
-e Council together with the relevant departments.

Article 21
Taxpayers selling goods or taxable services shall
issue special VAT invoices to the purchasers. Sale
-s amounts and output tax shall be separately indi
cated in the special VAT invoices.

Under one of the following situations, the invoice
to be issued shall be an ordinary invoice rather t
han the special VAT invoice:

(1)Sale of goods or taxable services to consumers;
(2)Sale of VAT exempt goods;
(3)Sale of goods or taxable services by small-scal
e taxpayers.


Article 22
The place for the payment of VAT is as follows:

(1)Businesses with a fixed establishment shall rep
ort and pay tax with the local competent tax autho
rities where the establishment is located. If the
head office and branch are not situated in the sam
e county (or city ), they shall report and pay tax
separately with their respective local competent
tax authorities. The head office may, upon the app
roval of the State Administration for Taxation or
its authorised tax authorities, report and pay tax
on a consolidated basis with the local competent
tax authorities where the head office is located.

(2)Businesses with a fixed establishment selling g
oods in a different county (or city ) shall apply
for the issuance of an outbound business activitie
s tax administration certificate from the local co
-mpetent tax authorities where the establishment i
s located and shall report and pay tax with the lo
cal competent tax authorities where the establishm
ent is located. Businesses selling goods and taxab
le services in a different county (or city ) witho
ut the outbund business activities tax administrat
ion certificate issued by the local competent tax
authorities where the establishment is located, sh
all report and pay tax with the local competent ta
-x authorities where the sales activities take pla
ce. The local competent tax authorities where the
establishment is located shall collect the overdue
tax which has not been reported and paid to the lo
cal competent tax authorities where the sales acti
vities take place.

(3)Businesses without a fixed base selling goods o
-r taxable services shall report and pay tax with
the local competent tax authorities where the sale
s activitees take place.

(4)For importation of goods, the importer or his a
gent shall report and pay tax to the cuetoms offic
e where the imports are declared.

Article 23
The VAT assessable period shall be one day, three
days, five days, ten days, fifteen days or one mon
th. The actual assessable period of the taxpayer s
hall be determined by the competent tax authoritie
s according to the magnitude of the tax payable of
the taxpayer; tax that cannot be assessed in regul
ar periods may be assessed on a transaction-by-tra
nsaction basis.

Taxpayers that adopt one month as an assessable pe
riod shall riprort and pay tax within ten days fol
lowing the end of the period.If an assessable peri
od of one day, three days, five days, ten days or
fifteen days is adopted, the tax shall be prepaid
within five days following the end of the period a
nd a monthly return shall be filled with any balan
-ce of tax due settled within ten days from the fi
rst day of the following month.

Article 24
Taxpayers importing goods shall pay tax within sev
en days after the issuance of the tax payment cert
ificates by the customs office.

Article 25
taxpayers exporting goods with the appliable 0% ta
x rate shall, upon completion of export procedures
with the customs office, apply for the tax refund
on those export goods to the tax authorities on a
monthly basis based on such relevant documents as
the export declaration document. The detailed meas
-ures shall be formulated by the State Administrat
ion for Taxation.

Where the return of goods or the withdrawal of the
customs declaration occurs after the completion of
the tax refund on the export goods, the taxpayer
shall repay the tax refunded according to the laws

Article 26
The collection and administration of VAT shall be
conductedd in accordance with the relevabt regulat
ions of the on Tax Collection and Administration> and these R
-egulations.

Article 27
The collection of VAT from foreign investment ente
rprises and foreign enterprises shall be conducted
in accordance with the resolutions of the standin
g Committee of the National People"s Congress.

Article 28
The Ministry of Finance shall be responsible for the interpretation of these Regulati
ons and for the formulation of the Detailed Rules and Regulationsfor the Implementati
on of these Reguations.

Article 29
These Regulations shall come into effect from January 1, 1994, ons of the People"s Republic of China on Value-Added Tax> and the tions of the People"s Republic of Chin-a on Product Tax>promulgated by the State C
ouncil on September 18, 1984 shall be repealed on the same date.