Circular of the State Administration of Taxation on Some Tax Issues Concerning Export Goods of Enterprises with Foreign Investment
Circular of the State Administration of Taxation on Some Tax Issues Concerning Export Goods of Enterprises with Foreign Investment
Circular of the State Administration of Taxation on Some Tax Issues Concerning Export Goods of Enterprises with Foreign Investment
Guo Shui Fa [1999] No.189
October 8, 1999
All the State taxation bureaus of provinces, autonomous regions, municipalitie directly under the Central Government and cities separately listed on the State plan:
In order to further strengthen administration of tax refund (exemption) for export goods of the enterprises with foreign investment and support the expansion of export of the enterprises with foreign investment and in accordance with the spirit of relevant decisions of the State Council, some tax issues concerning export goods of the enterprises with foreign investment which were established upon approval before December 31, 1993 (hereinafter referred to as the old enterprises with foreign investment) are hereby notified as follows:
I. On the issue concerning the measures for tax refund (exemption) for export goods
Starting from November 1, 1999, the original tax exemption measures for export goods of the old enterprises with foreign investment by themselves or through their authorized agents shall be replaced by the export tax refund measures. The specific calculation method of tax refund (exemption) shall be governed by the current method of "collection first and refund later" or tax "exemption, credit and refund" for the self-operating production enterprises.
If an old enterprise with foreign investment requires to continue the tax exemption for its export goods, it may, before the end of November 1999, submit its application to the competent tax authority, and after approval, it may, before the end of the year 2000, continue to implement the provisions of the Circular on Relevant Issues Concerning the Tax Policy for Enterprises with Foreign Investment Established upon Approval before December 31, 1993 (CaiShuiZi [1998] No.184) promulgated by the Ministry of Finance, the Ministry of Foreign Trade and Economic Cooperation and the State Administration of Taxation for its export goods. Starting from January 1,2001, its export goods shall be governed by the tax refund measures.
II. On some issues concerning the specific policy after the implementation of tax refund (exemption) for export goods
1. The issue concerning tax refund (exemption) for the processing withsupplied materials or with imported materials.
The re-export of the old enterprises with foreign investment may, if their processing with supplied materials is completed directly by themselves, be exempt from the value-added tax and consumption tax at the link of processing; and if their processing with supplied materials is completed by other enterprises with foreign investment or domestic enterprises they authorized, be exempt from the consumption tax and value-added tax for authorized processing fees according to the Tax Exempt Certificate for Processing with Supplied Materials issued by the tax authorities in charge of tax refund.
If export goods are produced with imported materials and parts by the old enterprises with foreign investment in the form of processing with imported materials, the amount of tax refund may be adjusted and calculated according to the following formulas respectively:
(1) The calculation formula for the method of "collection first and refund later "shall be:
Tax payable in the period=Tax on domestic sales of goods in the period + FOB price of export goods in the period * Quoted exchange rate of Renminbi * Tax rate-(Tax on all purchases in the period +Price for tax calculation in the period approved by the Customs as duty free for import materials and parts * Tax rate).
Amount of tax refund in the period=FOB price of export goods in the period * Quoted exchange rate of Renminbi * Tax refund rate-Price for tax calculation in the period approved by the Customs as duty free for import materials and parts * Tax refund rate.
(2) The calculation formula for the method of tax "exemption, credit and refund" shall be:
Tax not be credited or refunded in the period=FOB price of export goods in the period * Quoted exchange rate of Renminbi * (Tax rate-Tax refund rate)-Price for tax calculation in the period approved by the Customs as duty free for import materials and parts * (Tax rate-Tax refund rate).
The specific calculation procedures and formulas thereof shall continue to be governed by the relevant provisions of the Supplementary Circular of the Ministry of Finance and the State Administration of Taxation on Some Tax Issues Concerning Export Goods (CaiShuiZi [1997] No.014).
The above-mentioned tax rate and tax refund rate mean the tax rate and tax refund rate applicable to re-export goods.
2.
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