Circular of the Ministry of Finance and the State Administration of Taxation Concerning the Tax Issues Related to the Implementation of the Decision of the Central Committee of the CPC and the State Council on the Strengthening of Technological Innovation, the Development of High Technology, and the Realization of Industrialization

Circular of the Ministry of Finance and the State Administration of Taxation Concerning the Tax Issues Related to the Implementation of the Decision of the Central Committee of the CPC and the State Council on the Strengthening of Technological Innovation, the Development of High Technology, and the Realization of Industrialization
[Lexis China Comments]
Article 1 of the document is repealed in accordance with the Circular on Value-added Tax Policy on Software Products (Cai Shui [2011] No.100).



Circular of the Ministry of Finance and the State Administration of Taxation Concerning the Tax Issues Related to the Implementation of the Decision of the Central Committee of the CPC and the State Council on the Strengthening of Technological Innovation, the Development of High Technology, and the Realization of Industrialization

Cai Shui Zi [1999] No. 273

November 2, 1999

To the department of Customs, the financial departments (and bureaus) in all provinces, autonomous regions, municipalities directly under the jurisdiction of the Central Government, and the cities specifically designated in the state plan, the state administrations of taxation, the local administrations of taxation, and Xinjiang Production and Construction Corps:

With the primary aim of carrying out the goals of the Decision of the Central Committee of the CPC and the State Council on the Strengthening of Technological Innovation, the Development of High Technology, and the Realization of Industrialization (Zhong Fa [1999]No.14) and encouraging technological innovation and the development of high-tech enterprises, the relevant tax issues are hereby clarified as follows:

Article 1 Value-Added Tax
1. In regard to general taxpayers who sell computer software products developed and produced independently, the potion of the actual tax burden exceeding 6% shall be refunded upon collection after the tax has been levied in accordance with the statutory rate of 17%.
2. The small-scale taxpayers of the manufacturing enterprises, who produce and sell computer software products, must pay the value-added tax at the rate of 6%. The small-scale taxpayers of commercial enterprises, who sell computer software products, must pay the value-added tax at the rate of 4%, and the tax authorities may issue the invoices for the value-added tax on their behalf in light of the different tax rates.
3. In regard to software products sold together with the computer network, computer hardware, machines and equipment, the sales amount of the above-mentioned software products must be separately calculated. If it is not calculated separately or the calculation is unclear, the value-added tax shall be levied at the tax rate applicable to the computer network, computer hardware, machines and equipment, and the tax shall not be refunded.
4. The term 'computer software products' refers to storage media upon which computer programs and their related files are recorded (including floppy disks, hard disks, optical disks, and etc.).
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