Laws of the People's Republic of China

Ministry of Finance, The State Administration of Taxation

Circular of Ministry of Finance and the State Administration of Taxation on Abolishing Taxation Policies relating to Steels Processed and Exported for Special Purpose

Cai Shui [2005] No.105

To department (bureaus) of finance in all the provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, State Administration of Taxation, financial bureau of Xinjiang Production and Construction Corporations,

Upon the approval of the State Council, the existing taxation policies related to steels processed and exported for special purpose shall be abolished, the related matters are hereby notified as follows:

I.

The documents listed below shall be abolished from the date of July 1, 2005,

1.

Circular on Tax-refund on Domestic Steel Sold in Tax-reserving Zones Replacing Imported Steel for Listed Enterprises (Cai Shui Zi [1998] No.53);

2.

Complementary Circular on Modifying the Steel Producing Substitution Measures of Ministry of Finance, The state Economy and Trade Commission, The State Administration of Taxation and The General Administration of Customs(Cai Shui Zi [1999] No.34);

3.

Circular on the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry of Finance, The State Administration of Taxation and The General Administration of Customs(MFOTEC Trade[1999] No.144);

4.

Circular on Distributing 'The Detailed Implementing Rules on Modifying the Steel Producing Substitution Measures' of The State Administration of Taxation, The state Economy and Trade Commission, Ministry of Finance, The General Administration of Customs and State Administration of Foreign Exchange (Guo Shui Fa [1999] No.68);

5.

Circular on Issues Relating to Adjusting the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry of Finance, The State Administration of Taxation and The General Administration of Customs(MFOTEC Trade[2002] No.381);

6.

Circular on Tax-refund on Steels Processed and Exported for Special Purpose for Listed Enterprises of Ministry of Finance and The State Administration of Taxation (Cai Shui [2004] No.15);

7.

Circular on Issues Relating to Ensuring the List of Tax-refund on Steels Processed and Exported for Special Purpose Enterprises of Ministry of Finance and Ministry of Business(Cai Shui [2004] No.102).

II.

Value-added tax shall be levied and invoice on value-added tax shall be issued on domestic steel sold by listed enterprises to the processing and exporting enterprises producing exporting products for special purpose in accordance with law, and no offset shall be available from the date on.

III.

The known plan for the duty exemption on processing and exporting steels for special purpose in 2005 shall be reissued after being adjusted by The State Administration of Taxation. The steels processed and exported for special purpose listed in the adjusted plan shall be sold within the date of June 30, 2005, and the supervision rules on steel producing substitution shall be issued before the date of June 30, 2005 by The Ministry of Supervision.

IV.

The offset taxation shall be collected and late fee shall be captured in accordance from the listed enterprises by local Taxation Offices should these enterprises, after the sale and the issuing of the invoice of the steels processed and exported for special purpose under the supervision rules on steel producing substitution, have not received the ensuring purchasing list on steel producing substitution from local Taxation Offices 3 months after having all the offset procedures finished.

V.

As for the steels processed and exported for special purpose duty-freely sold to processing enterprises by listed enterprises ahead of June 30, 2005, local Taxation Offices shall continue their work on the administration of tax on the use of duty-free steels processed and exported for special purpose in accordance with laws such as the Circular on Distributing 'the Detailed Implementing Rules on Modifying the Steel Producing Substitution Measures' of The State Administration of Taxation, The state Economy and Trade Commission, Ministry of Finance, The General Administration of Customs and State Administration of Foreign Exchange (Guo Shui Fa [1999] No.68).

This circular is specifically issued.

Ministry of Finance

The State Administration of Taxation

June 15, 2005