PROVISIONAL REGULATIONS OF THE PEOPLE¡äS REPUBLIC OF CHINA ON VALUEADDED TAX
 
        (State Council: 13 December 1993)
 
          Whole Doc.

Article 1
     All units and individuals engaged in the sales of goods, provision ofprocessing, repairs and replacement services, and the importation of goodswithin the territory of the People¡äs Republic of China  are  taxpayers  ofValue-Added Tax (hereinafter referred to as ¡ätaxpayers¡ä),  and  shall  pay VAT in accordance with these Regulations.
Article 2
     VAT rates:
     (1) For taxpayers  selling  or  importing  goods,  other  than  those stipulated in items (2) and (3) of this Article, the tax rate shall be 17%.
     (2) For taxpayers selling or importing the following goods,  the  tax rate shall be 13%:
     I. F     Taxpayers importing goods shall pay tax within seven days  after  the
issuance of the tax payment certificates by the customs office.
Aood grains, edible vegetable oils;
     II. Tap water,  heating,  air  conditioning,  hot  water,  coal  gas,liquefied petroleum gas, natural gas, methane gas, coal/charcoal  products for household use;
     III. Books, newspapers, magazines;
     IV. Feeds, chemical fertilizers, agricultural chemicals,agricultural machinery and covering plastic film for farming;
     V. Other goods as regulated by the State Council.
     (3) For taxpayers exporting goods, the tax rate shall be 0%,except as otherwise stipulated by the State Council.
     (4)  For  taxpayer  providing  processing,  repairs  and  replacement services (hereinafter referred to as ¡ätaxable  services¡ä),  the  tax  rate shall be 17%.
     Any adjustments to the tax rates shall be  determined  by  the  State Council.
Article 3
     For taxpayers dealing in goods or  providing  taxable  services  with different tax rates, the sales amounts for goods or taxable services  with different tax rates shall  be  accounted  for  separately.  If  the  sales amounts have not been accounted for separately, the higher tax rate  shall apply.
Article 4
     Except  as  stipulated  in  Article  13  of  these  Regulations,  for taxpayers engaged in the sales  of  goods  or  the  provision  of  taxable services (hereinafter referred to as ¡äselling goods or taxable services¡ä),the tax payable shall be the balance of output tax for  the  period  after deducting the input tax for the period. The formula for computing the  tax
payable is as follows:
     Tax payable=Output tax payable  for  the  period-Input  tax  for  the period If the output tax for the period is less than and  insufficient  to offset against the input tax for the period, the excess input tax  can  be carried forward for set-off in the following periods.

Article 5
     For taxpayers selling goods or taxable services, the output tax shall be the VAT payable calculated based on the sales amounts and the tax rates prescribed in Article 2  of  these  Regulations  and  collected  from  the purchasers. The formula for computing the output tax is as follows:
              Output tax=Sales amount x Tax rate
Article 6
     The sales amount shall be  the  total  consideration  and  all  other charges receivable from the purchasers by the taxpayer  selling  goods  or taxable services, but excluding the output tax collectible.
     The sales amount shall be computed in renminbi. The sales  amount  of the taxpayer  settled  in  foreign  currencies  shall  be  converted  into renminbi according to the exchange rate prevailing in the foreign exchange market.
Article 7
     Where the price used by the taxpayer  in  selling  goods  or  taxable services is obviously low and  without  proper  justification,  the  sales amount shall be determ