Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Interpretations to the Scope of Tax on Agricultural Products

Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Interpretations to the Scope of Tax on Agricultural Products
Circular of the Ministry of Finance and the State Administration of Taxation on Promulgating the Interpretations to the Scope of Tax on Agricultural Products

Cai Shui Zi[1995] No. 52

June 15, 1995

The financial departments (bureaus) and state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan,

In accordance with the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustments to the Tax Rate for Value-added Tax on Agricultural Products and the Exemption of Value-added Tax for Certain Items (Cai Shui Zi [1994] No.4), the tax rate for value-added tax on agricultural products was changed from 17% to 13% on May 1, 1994. The Interpretations to the Scope of Tax on Agricultural Products (hereinafter referred to as the "Interpretations") are hereby issue to you. Relevant issues are clarified as follows:

I. The term "self-produced agricultural products sold by agricultural producers" as used in the first one of the tax-free items set out in Article 16 of the Interim Regulations of the People's Republic of China on Value-added Tax means self-produced agricultural products set out in the Interpretations that are sold by entities or individuals directly engaging in the business of growing and harvesting plants and breading and catching animals. Agricultural products purchased from others that are sold by the aforesaid entities or individuals and agricultural products purchased from others which are sold by the entities or individuals after being further produced or processed and which belong to those set out in the Interpretations should not be included in the scope of tax exemption and should be levied value-added tax at a required tax rate.

II. For refined tea which is produced with tender tea leaves self-produced by agricultural producers after going through the process of sifting, winnowing, culling, shattering, drying, evenly-piling and others, provisions relating to the exemption of tax on self-produced agricultural products that are sold by agricultural producers should not be applied and tax should be levied at a required tax rate accordingly.

This Circular should come into effect on July 1, 1995 and provisions made by state taxation bureaus at different locations for the scope of agricultural products should be repealed at the same time.

Appendix:
Interpretations to the Scope of Tax on Agricultural Products

Making a copy of the Interpretations to: the local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, state taxation bureaus and local taxation bureaus in Shenyang, Changchun, Harbin, Nanjing, Wuhan, Guangdong Province, Chengdu, and Xi'an, and the offices of financial supervisory commissioners dispatched by the Ministry of Finance in all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan.

Attachment: Interpretations to the Scope of Tax on Agricultural Products

Agricultural products means all kinds of primary vegetable and animal products produced in the planting, breading, forestry, animal husbandry, and aquaculture industries.
  ......
Please consent to the LexisNexis Terms and Conditions and Privacy Policy.