PROVISIONAL REGULATIONS OF THE PEOPLE´S REPUBLIC OF CHINA ONCONSUMPTION TAX

     (State Council: 13 December 1993)

     Whole Doc.

Article 1
     All units and individuals engaged in the  production,  subcontractingfor processing or the importation of consumer goods  prescribed  by  these Regulations (hereinafter referred to as ´taxableconsumer  goods´)  withinthe  territory  of  the  People´s  Republic  of  China  are  taxpayers  of Consumption Tax (hereinafter referred to as  ´taxpayers´)  and  shall  pay Consumption Tax in accordance with these Regulations.
Article 2
     The taxable items, tax rates (tax amounts) of Consumption  Tax  shall be determined in accordance with the  attached to these Regulations. Any adjustments to the Consumption Tax taxable items, tax rates  (tax amounts) shall be determined by the State Council.
Article 3
     For taxpayers dealing in taxable consumer goods  with  different  tax rates, the sales amounts and sales volumes for the taxable consumer  goods shall be accounted for separately. If the sales amounts and sales  volumes have not been accounted for separately or if the  taxable  consumer  goods with different tax rates are combined into a whole set of  consumer  goods for sales, the higher tax rate shall apply.
Article 4
     Taxable consumer goods produced by the taxpayer shall be  subject  to tax  upon  sales.   For  self-produced  taxable  consumer  goods  for  the taxpayer´s own use in the continuous production of taxable consumer goods, no tax shall be assessed;  tax  shall  be  assessed  when  the  goods  are transferred for other use.
     For taxable consumer goods sub-contracted  for  processing,  the  tax shall be collected and paid by the sub-contractor  upon  delivery  to  the contractor. For taxable consumer goods, sub-contracted for processing used by 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  import declaration.
Article 5
     The computation of tax  payable  for  Consumption  Tax  shall  follow either the rate on value or the amount on volume method. The formulas  for computing 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  amounts are computed in foreign currencies, the taxable amounts shall be converted into Renminbi according to the exchange rates prevailing  in  the  foreign exchange market.
Article 6
     The "sales amount" as stipulated in Article 5  of  these  Regulations shall be the total consideration and other  charges  receivable  from  the buyer for the taxable consumer goods sold by the taxpayer.
Article 7
     Self-produced taxable consumer goods for the taxpayer´s own use  that shall be subject to tax in accordance with the stipulations of  the  first paragraph in Article 4 of these Regulations shall be assessed according to the selling price of similar consumer goods produced by the  taxpayer.  If the selling price of similar consumer goods  is  not  available,  the  tax
shall be assessed  according  to  the  composite  assessable  value.   The formula for computing the composite assessable value is as follows:
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