Laws of the People's Republic of China

REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON
PRODUCT TAX (DRAFT)

 (Promulgated 18 September 1984 by the State Council)

 

 

SUBJECT: TAXATION

ISSUING-DEPT: STATE COUNCIL OF CHINA

ISSUE-DATE: 09/18/19

IMPLEMENT-DATE: 10/01/1984

LENGTH: 6644 words

TEXT:

[Article 1] Any unit or individual who, within the people's Republic of China, manufactures or imports products taxable under the provisions of these Regulations and has an obligation to pay Product Tax, (hereinafter referred to as a taxpayer), shall pay Product Tax according to these Regulations.

[Article 2] Items subject to Product Tax and tax rates shall be implemented according to the attached "Table of Taxable Items and Rates of Product Tax -

The Ministry of Finance shall be empowered by the State Council to determine any adjustment to either a taxable item or a tax rate.

[Article 3] A taxpayer who manufactures industrial goods shall calculate tax either according to the amount of sales income of the product and the stipulated tax rate, or according to the quantity of the product and the stipulated amount of tax.

A product manufactured by an industrial enterprise and used in continuous production within the same enterprise shall not be taxable.  If, however, there is a specitifc stipulation in the Table of Taxable Itmes and Rates, tax shall be calculated in accordance with the provisions of the previous paragraph.

A taxable product manufactured by an industrial enterprise and used by the enterprise in a non-production project shall be taken as being sold and shall be taxed according to the relevant rates, except where other provisions prevail.

[Article 4] Where taxable agricultrual, forestry, pastoral or aquatic products are produced by a unit or individual and are sold to a State or collective purchasing unit, the tax payable shall be calculated by the purchasing unit according to the amount paid and the stipulated tax rate, and where products are sold to other units and individ uals, the tax payable shall be calculated by the seller according to the product sales income and the stipulated tax rate.

[Article 5] A taxpayer importing goods, shall, after Gustoms clearance and based on the quantity of the goods, calculate the tax payable according to the stipulated composite tax calculation price and the stipulated tax rate.

The composite tax calculation price = (landed price + Customs duty) divided by (1- Product Tax rate).

Product Tax on imported goods shall be collected by Customs.

[Article 6] For a product manufactured on a commission basis, where the commissioning party is an industrial enterprise, the product shall be treated as if it were a product manufactured by the industrial enterprise and shall be handled inaccordance with Article 3 of these Regulations.  Where the Commissioning party is not an industrial enterprise, the commissioning party shall be liable for any tax payable.

[Article 7] Tax reuction and exemption:

(1) Taxable products, the export of which is encouraged by the State and which are directly exported by the production unit shall be exempt.  An exporter can apply for a tax rebate on goods on which Product Tax has already been paid, after these goods have received Customs clearance for export.

(2) Gold ore, gold and contraceptive products shall be expempt.

(3) New products listed in the State plan for trial production shall be granted a tax reduction or exemption for a fixed period.

(4) Products which use waste residue, Waste liquid or waste gas shall be granted a tax reduction or exemption for a fixed period.

(5) Products manufactured in minority nationality areas to meet the special needs of the minority people shall be granted a tax reduction or exemption for a fixed period where there is difficulty paying tax in accordnace with regulations.

(6) Other products which need to be granted tax reduction or exemption for a fixed period, owing to special conditions, shall be handled in accordance with the jurisdiction for tax collection management as stipulated by the State.

[Article 8] A taxpayer shall register with the local tax authority within 30 days or commencing business operations.

[Article 9] A taxpayer which receives approval from the appropriate department for its business to merge, for it to change the nature of its business, to move or cease operations shall change registration or cancel registration at the local tax authority within 30 days of the approval and clear any tax payments outstanding.

[Article 10] The time limit for payment of Product Tax shall be determined by the local tax authority on the basis of the amount of tax to be paid by the taxpayer, up to a maximum period of one month.

[Article 11] A taxpayer shall lodge its tax return with the local tax authority within the stipulated time limit.

[Article 12] If a taxpayer has an obligation to pay tax, but does not lodge a tax return in accordance with regulations, the local tax authority shall have the right to determine the amount of tax due.

[Article 13] a tax authority shall have the power to investigate the finances, accounting practices and circumstances of tax payment of a taxpayer.  A taxpayer shall report details in accordance with actual conditions and provide relevant material, and shall not conceal or refuse to provide information.

[Article 14] a taxpayer shall pay tax within the time limit stipulated by the tax authorities.  If a taxpayer does not pay tax on time, apart from being pursued for payment within a prescribed period, a daily late tax payment fine of 0.5% of the tax due shall be imposed beginning from the first day in arrears.

If the tax authority is unable to expedite the payment of taxes by a taxpayer, it may notify the taxpayer's bank to garnish the taxpayer's funds,

[Article 15] If a taxpayer violates the provisions of Article 8, 9, 11 or 13 of these Regulations, the tax authority may fine the taxpayer up to 5 thousand yuan, depending on the circumstances.  In addition to the tax due, a fine of up to 5 times the amount of tax due, depending on the circumstances, may be levied on a tax payer which conceals information on production and operating conditions or does not lodge a tax return on time.  If the tax evasion or avoidance is serious and constitutes a violation of the law.  the tax authority shall request a judicial organ to investigate criminal liability in accordance with the law.

[Article 16] Any person may report a taxpayer which fails to pay tax in accordance with the provisions of these Regulations.  After the tax authority has investigated the case, it may decide to issue a reward to the person reporting the case and shall also guarantee confidentiality.

[Article 17] If there is a dispute between a tax authority and a taxpayer, the tax shall first be paid in accordance with the amount determined by the tax authority, and then an application may be made to a higher level tax authority for rconsideration of the case.  The higher level tax authority shall issue a response within 30 days of receiving the application.  If the taxpayer is not satisfied with the said response, it may bring a suit in a people's court.

[Article 18] The Ministry of Finance shall formulate detailed rules for the implementation of these Regulations.

[Article 19] These Regulations shall come into trial implementation on 1 October 1984.

Table of Taxable Items and Rates and Rrtes of Prouduct Tax Attachment to The Regulations on Product Tax (Draft)

Industrial Products
Classification	Taxable Item	Scope	Tax Rate
1 Tobacco	1. Cigarettes:		60
	†††Grade A		60
	†††Grade B		56
	†††Grade C	including pipe tobacco	50
	†††Grade D	and mohe tobacco (a	32
	2. Cigars	special type of tobacco	47
	3. Cut tobacco	grown in Xinjiang)	35
II Liquor (wins	4. With spirtis:
and spirits)
	†††cereal based		50
	†††potato based		40
	†††husk (bran) based		28
	5. Yellow spirits	includign liquors used	50
	6. Native sweet	for medicinal purposes,	38
	†††liquor	compound liquors and
	7. Beer	nutritonal wines	40
	8. Reprocessed liquor		30
	9. Fruit based wines		15
	10. Spqrkling wines		15
	11. Medicinal wines		13
	12. Ethyl alcohol		10
	13. Cane sugar:
	††††machine-processed
	††††hand-cut		22
	14.Beet sugar		10
	15. Starch sugar	including sorghum sugar,	5
		maltose. malt sugar,	15
		liquid glucose, dextrin
		grape syrup, etc.
	16. Processed	refers to crystal sugar,	5
	††††sugar	cube sugar, castor sugar
		processed from sugar
		purchased after tax
	17. Wheat flour		5
	18. Milk powder,
	††††condensed
	††††milk		5
	19. Monosodium	refers to crystal sugar,	13
	††††glutamate	cube sugar, castor sugar
		processed from sugar
	20. Cream	purchased after tax	5
	21. Cannel foods		5
	22. Soft drinks	includig coca-Cola	10
	23. Other liqulid	included cocentrated	10
	††††drinks	fruit juice, fruit
		juice, fruit syrup,
	††††mineral water, etc.
	24. Powered drinks	including fruit	5
		crystals, malt and milk
		extract, cocoa powder,
		coffee, ect.
	25. Sweets and	5
	††††pastries
	26. Preserved fruit	5
	††††and jam
	27. Other foods	5
IV Textile	28. Chemical fibres:
†Products	††††Chemical short
	††††staple fibres	5
	††††Man-made continuous
	††††filament fibres	15
	††††Synthetic continuous
	††††filament fibres	10
	29. Cotton yarn:
	††††Pure cotton yarn,	(1) cotton synthetic
	††††cotton synthetic	yarn refers to mixed
	††††yard (1)	fibres of cotton with
		cotton-type chemiucal
		fibres other than
		terylene or middle to
		long staple
	†††18 counts or less	synthetic yard	4
	†††19-28 counts		7
	†††29-59 counts		10
	†††60 counts or more		13
	†††Cotton-type terylene	(2) cotton-type terylene	13
	†††yard (2)	yarn includes:pure
		cotton-type terylene
		yarn
	††Other cotton-type	(3) other cotton-type
	††fibre yard	chemical fibre yarn
		includes: other
		cotton-type pure
		chemical fibre yarn,
		other middle to long
		staple pure
		synthetic yarn
	30.Cotton grey	refers to grey cloth	3
		machine-made from
		various yarns on which
		tax is levied as per
		cotton fabric
	31. Yarn-dyed cotton	refers to yarn-dyed	5
	†††fabric	fabric machine-made from
		various yarns on which
		tax is levied as per
		cotton yarn.
	32.Printed and dyed	refers to printed and	8
	††cotton	dyed fabric machine-made
	††fabric	from various yarns on
		which tax is levied as
		per cotton yarns
	33. Handwove cloth		12
	34. Wool tops		5
	35. Woollen yarn,	including pure woollen
	††††woollen thread	yarn, woollen thread,
	††††(knintting wool)	woollen yarn
	††††and thread mixed	chemical	18
	††††with other fibres,	blerded yarn and
	††††wool-type	wool-type
	††††pure yard and	fibres mixed with cotton
	††††thread,	middle and long chemical
	††††thread of chemical	fibres, blended yarn and
	††††type or	thread of wool-type