Interim Value-Added Tax Regulations of the People's Republic of China (Revised in 2016)

Interim Value-Added Tax Regulations of the People's Republic of China (Revised in 2016)
Interim Value-Added Tax Regulations of the People's Republic of China (Revised in 2016)

Order of the State Council No.666

February 6, 2016

(Published by the Order of the State Council of the People's Republic of China No.134 on December 13, 1993; revised and adopted at the 34th executive meeting of the State Council on November 5, 2008; and, revised in accordance with the Decision of the State Council on Revising Certain Administrative Regulations dated February 6, 2016)

Article 1 Entities and individuals selling goods and providing processing, repairs or maintenance services in China, or importing goods to China, shall be identified as taxpayers of value-added tax, and shall pay value-added tax under the Interim Value-Added Tax Regulations of the People's Republic of China (Revised in 2016) (these "Regulations").

Article 2 Value-added tax rates:
1. Taxpayers who sell or import goods and do not fall within the scope as specified in Item 2 and Item 3 of this Article shall be subject to a 17% tax rate.
2. Taxpayers who sell or import the goods listed below shall be subject to a 13% tax rate:
(1) food and edible vegetable oil;
(2) tap water, heat supply, air-conditioners, hot water, gas, liquefied petroleum gas, natural gas, methane and civil-use coal products;
(3) books, newspapers and magazines;
(4) feeds, chemical fertilizers, pesticides, agricultural machineries and mulching films; and
(5) other goods specified by the State Council.
3. Taxpayers who export goods are subject to a zero tax rate, unless otherwise specified by the State Council.
4. Taxpayers who provide processing, repairs and maintenance services (taxable laboring services) shall be subject to a 17% tax rate.
Adjustments to the tax rates shall be decided by the State Council.

Article 3 Taxpayers who trade in goods or taxable laboring services subject to different tax rates shall separately calculate the sales value of such goods or taxable laboring services based on the applicable tax rates. Where the sales values are not calculated separately, the highest tax rate applies.

Article 4 Except in circumstances specified in Article 11 of these Regulations, taxpayers' liability for selling goods or providing taxable laboring services (sales of goods or taxable laboring services) shall amount to the balance after deducting input tax from output tax in the current period. The formula for the taxable amount is as follows:
Taxable Amount = Output Tax in the Current Period - Input Tax in the Current Period
Where output tax is less than input tax in the current period, the unutilized input tax may be carried forward to the subsequent period.

Article 5 Output tax is the amount of value-added tax calculated and collected by taxpayers from their purchasers for the sales of goods or taxable laboring services based on the multiplication of the sales value by the rates listed in Article 2 of these Regulations. The formula for the calculation of output value-added tax is as follows:
Output Tax = Sales Value x Tax Rate

Article 6 Sales value shall include the full price charged by taxpayers on their purchasers for the sales of goods or laboring services plus additional fees and charges, but shall not include the output value-added tax.
Sales value shall be calculated in Renminbi.
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