Laws of the People's Republic of China

State Administration of Taxation

Circular of State Administration of Taxation on Strengthening the Administration of Tax Refund (Exemption) for Export of Products with Gold Ingredient

Guo Shui Han [2005] No. 1211

To State taxation bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed in the State plan:

Since the late 2004, export of products with gold ingredient have achieved exceptionally fast growth. In order to prevent frauds of tax refunds for export, the State Administration of Taxation has successively issued several documents, such as the Circular of the State Administration of Taxation on Clarifying Some Policies Concerning Tax Refund (Exemption) for Export of Products with Gold Ingredient (Guo Shui Faˇ˛2005ˇłNo.59) and the Circular of State Administration of Taxation on Relevant Tax Policies for Export of Products with Gold Ingredient (Guo Shui Faˇ˛2005ˇłNo.125), to appropriately adjust some policies on tax refund (exemption) for export of products with gold ingredient, and deploy investigation within areas where more products with gold ingredients are exported. For the purpose of further strengthening the administration of tax refund (exemption) for export of products with gold ingredient and taking strict precautions against tax frauds, upon deliberation, related issues are hereby released as follows:

1.

For products with gold ingredient exported by export enterprises, it shall be required to go through tax exemption or refund formalities in all localities subject to the document Guo Shui Fa ˇ˛2005ˇłNo.125. Where products with gold ingredient are exported prior to May 1, 2005, tax authorities of places where export enterprises are located must, after conducting an investigation by letter with tax authorities of commodity origins, and carefully learning about whether irregularities have occurred in production and operation purchases of raw materials and tax payment affairs of supplier enterprises in recent years, approve tax refund (exemption) for such export of products with gold ingredient as being eliminated from suspicion of tax frauds; and shall continue the investigation for sure if facts are not clear thus unable to eliminate the suspicion of tax frauds. Before facts are clear, the handling of tax refund (exemption) formalities shall be suspended; Where facts are impossible to be made clear or there is suspicion of tax frauds through investigation, the handling of tax refund (exemption) formalities shall be forbidden. For products with gold ingredient exported subsequent to May 1, 2005, it shall be required to go through tax exemption formalities in strict compliance with the document Guo Shui Fa ˇ˛2005ˇłNo.125.

2.

All localities shall from now on intensify macro-monitoring of tax refund (exemption) for exceptional growing export of products within their jurisdiction, assess and analyze voluntarily export trend and impacts of such macro-monitoring upon tax policies concerning tax refund (exemption) for export, find out problems, plug up loopholes and prevent the occurrence of tax fraud and other tax-related cases.

State Administration of Taxation

December 20, 2005