Tax
BIZCHINA / Taxation
Provisional Regulations of the People's Republic of China on Consumption
Tax
Updated: 2006-04-17 14:17
(State Council: 13 December 1993)
Article 1
All units and individuals engaged in the production, subcontractingfor
processing or the importation of consumer goods prescribed by
theseRegulations (hereinafter referred to as 'taxable consumer goods')
withinthe territory of the People's Republic of China are taxpayers
ofConsumption Tax (hereinafter referred to as 'taxpayers') and shall
payConsumption Tax in accordance with these Regulations.Article 2
The taxable items, tax rates (tax amounts) of Consumption Tax shallbe
determined in accordance with the attached to these Regulations.
Any adjustments to the Consumption Tax taxable items, tax rates
(taxamounts) shall be determined by the State Council.Article 3
For taxpayers dealing in taxable consumer goods with different taxrates,
the sales amounts and sales volumes for the taxable consumer goodsshall
be accounted for separately. If the sales amounts and sales volumeshave
not been accounted for separately or if the taxable consumer goodswith
different tax rates are combined into a whole set of consumer goodsfor
sales, the higher tax rate shall apply.Article 4
Taxable consumer goods produced by the taxpayer shall be subject totax
upon sales. For self-produced taxable consumer goods for thetaxpayer's
own use in the continuous production of taxable consumer goods,no tax
shall be assessed; tax shall be assessed when the goods aretransferred
for other use.
For taxable consumer goods sub-contracted for processing, the taxshall be
collected and paid by the sub-contractor upon delivery to thecontractor.
For taxable consumer goods, sub-contracted for processing usedby the
contractor for the continuous production of taxable consumer goods,the
tax paid can be credited in accordance with the regulations.
Imported taxable consumer goods shall be subject to tax upon
importdeclaration.Article 5
The computation of tax payable for Consumption Tax shall followeither the
rate on value or the amount on volume method. The formulas forcomputing
the tax payable are as follows:
The tax payable computed under the rate on value method
= Sales amount x Tax rate.
The tax payable computed under the amount on volume method
= Sales volume x Tax amount per unit.
For taxable consumer goods sold by taxpayers where the sales amountsare
computed in foreign currencies, the taxable amounts shall be
convertedinto Renminbi according to the exchange rates prevailing in the
foreignexchange market.Article 6
The "sales amount" as stipulated in Article 5 of these Regulationsshall
be the total consideration and other charges receivable from thebuyer for
the taxable consumer goods sold by the taxpayer.Article 7
Self-produced taxable consumer goods for the taxpayer's own use thatshall
be subject to tax in accordance with the stipulations of the
firstparagraph in Article 4 of these Regulations shall be assessed
according tothe selling price of similar consumer goods produced by the
taxpayer. Ifthe selling price of similar consumer goods is not available,
the taxshall be assessed according to the composite assessable value.
Theformula for computing the composite assessable value is as follows:
(Cost + profit)
Composite assessable value = --------------------------
(1-Consumption Tax rate)Article 8
Taxable consumer goods sub-contracted for processing shall beassessed
according to the selling price of similar consumer goods of
thesub-contractor. If the selling price of similar consumer goods is
notavailable, the tax shall be assessed according to the composite
assessablevalue. The formula for computing the composite assessable value
is asfollows:
(Cost of material + Processing fee)
Composite assessable value = -------------------------------------
(1 - Consumption Tax rate)Article 9
Imported taxable consumer goods which adopt the rate on value methodin
computing the tax payable shall be assessed according to the
compositeassessable value. The formula for computing the composite
assessable valueis as follows:
customs dutiable value + Customs Duty
Composite assessable value = --------------------------------------
(1 - Consumption Tax rate)Article 10
Where the taxable value of the taxable consumer goods of the taxpayeris
obviously low and without proper justification, the taxable value shallbe
determined by the competent tax authorities.Article 11
For taxpayers exporting taxable consumer goods, the Consumption Taxshall
be exempt, except as otherwise determined by the State Council.
Themeasures for exemption of exported taxable consumer goods shall
beregulated by the State Administration for Taxation.Article 12
Consumption Tax shall be collected by the tax authorities.Consumption Tax
on the importation of taxable consumer goods shall becollected by the
customs office on behalf of the tax authorities.
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