Circular of the Ministry of Finance on Printing and Distributing the Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-Added Tax
Circular of the Ministry of Finance on Printing and Distributing the Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-Added Tax
Circular of the Ministry of Finance on Printing and Distributing the Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-Added Tax
Cai Fa Zi [1993] No. 38
December 25, 1993
All ministries and commissions of the State Council and institutions directly under the State Council,People's governments of all provinces, autonomous regions and municipalities directly under the Central Government, the Finance Departments (Bureaus), State Administration of Taxation Offices and Local Taxation Bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in State planning,
The Printing and Distributing the Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-added Tax are hereby printed and distributed to you for compliance and implementation.
Appendix:
Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-added Tax
Article 1 These Detailed Rules are formulated in accordance with the stipulations of Article 28 of the Interim Regulations of the People's Republic of China on Value-added Tax (hereinafter referred to as "the Regulations").
Article 2 "Goods" as mentioned in Article 1 of the Regulations refers to tangible moveable goods, including electricity, heat, and gas.
"Processing" as mentioned in Article 1 of the Regulations refers to the business of contracting to process goods, where the contractor supplies the raw materials and major materials and the sub-contractor manufactures the goods in accordance with the requirements of the contractor and receives a processing fee.
"Repairs and replacement" as mentioned in Article 1 of the Regulations refers to the business of contracting to carry out repairs of damaged or malfunctioned 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 ownership of goods for any consideration.
"Provision of processing, repairs and replacement services" as mentioned in Article 1 of the Regulations refers to the provision of processing, repairs 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 units or employers shall not be included.
"Consideration" as mentioned in these Detailed Rules includes money, goods or any economic benefit obtained from the purchasers.
Article 4 The following activities of units or individual operators shall be deemed as sales of goods:
1.Consignment of goods to others for sale;
2. Sale of goods under consignment;
3.Transfer of goods from one establishment to other establishments for sale by a taxpayer that maintains two or more establishments and adopts consolidated accounting, unless the relevant establishments 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 purchased goods to shareholders or investors;
6. Distribution of self-produced, processed or purchased goods to shareholders or investors;
7.Use of self-produced or processed goods for collective welfare or personal consumption;
8.Giving out self-produced, processed or purchased goods to others as free gifts.
Article 5 A sales activity that involves goods and non-taxable services shall be a mixed sales activity. Mixed sales activities of enterprises, enterprise units or individual business operators engaged in production, wholesaling or retailing of goods shall be regarded as sales of goods that shall be subject to VAT. Mixed sales activities of other units or individuals shall be regarded as sales of non-taxable services that shall not be subject to VAT.
Whether a taxpayer's sales activity is a mixed sales activity shall be determined by the tax collecting authorities under the State Administration of Taxation.
"Non-taxable services" as mentioned in the first paragraph of this Article refers to the services subject to Business Tax within the scope of the taxable items of communications and transportation construction, finance and insurance, posts and telecommunications, culture and sports, entertainment, and service industries.
"Enterprises, enterprise units or individual business operators engaged in production, wholesaling or retailing of goods" as mentioned in the first paragraph of this Article includes enterprises, enterprise units, and individual business operators principally engaged in production, wholesaling or retailing of goods and also engaged in non-taxable services.
Article 6 Taxpayers also engaged in non-taxable services shall account separately for the sales amount of goods and taxable services and non-taxable services.
......
Cai Fa Zi [1993] No. 38
December 25, 1993
All ministries and commissions of the State Council and institutions directly under the State Council,People's governments of all provinces, autonomous regions and municipalities directly under the Central Government, the Finance Departments (Bureaus), State Administration of Taxation Offices and Local Taxation Bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in State planning,
The Printing and Distributing the Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-added Tax are hereby printed and distributed to you for compliance and implementation.
Appendix:
Detailed Rules for the Implementation of the Tentative Regulations of the People's Repubic of China on Value-added Tax
Article 1 These Detailed Rules are formulated in accordance with the stipulations of Article 28 of the Interim Regulations of the People's Republic of China on Value-added Tax (hereinafter referred to as "the Regulations").
Article 2 "Goods" as mentioned in Article 1 of the Regulations refers to tangible moveable goods, including electricity, heat, and gas.
"Processing" as mentioned in Article 1 of the Regulations refers to the business of contracting to process goods, where the contractor supplies the raw materials and major materials and the sub-contractor manufactures the goods in accordance with the requirements of the contractor and receives a processing fee.
"Repairs and replacement" as mentioned in Article 1 of the Regulations refers to the business of contracting to carry out repairs of damaged or malfunctioned 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 ownership of goods for any consideration.
"Provision of processing, repairs and replacement services" as mentioned in Article 1 of the Regulations refers to the provision of processing, repairs 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 units or employers shall not be included.
"Consideration" as mentioned in these Detailed Rules includes money, goods or any economic benefit obtained from the purchasers.
Article 4 The following activities of units or individual operators shall be deemed as sales of goods:
1.Consignment of goods to others for sale;
2. Sale of goods under consignment;
3.Transfer of goods from one establishment to other establishments for sale by a taxpayer that maintains two or more establishments and adopts consolidated accounting, unless the relevant establishments 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 purchased goods to shareholders or investors;
6. Distribution of self-produced, processed or purchased goods to shareholders or investors;
7.Use of self-produced or processed goods for collective welfare or personal consumption;
8.Giving out self-produced, processed or purchased goods to others as free gifts.
Article 5 A sales activity that involves goods and non-taxable services shall be a mixed sales activity. Mixed sales activities of enterprises, enterprise units or individual business operators engaged in production, wholesaling or retailing of goods shall be regarded as sales of goods that shall be subject to VAT. Mixed sales activities of other units or individuals shall be regarded as sales of non-taxable services that shall not be subject to VAT.
Whether a taxpayer's sales activity is a mixed sales activity shall be determined by the tax collecting authorities under the State Administration of Taxation.
"Non-taxable services" as mentioned in the first paragraph of this Article refers to the services subject to Business Tax within the scope of the taxable items of communications and transportation construction, finance and insurance, posts and telecommunications, culture and sports, entertainment, and service industries.
"Enterprises, enterprise units or individual business operators engaged in production, wholesaling or retailing of goods" as mentioned in the first paragraph of this Article includes enterprises, enterprise units, and individual business operators principally engaged in production, wholesaling or retailing of goods and also engaged in non-taxable services.
Article 6 Taxpayers also engaged in non-taxable services shall account separately for the sales amount of goods and taxable services and non-taxable services.
......