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Circular of the
State Administration of Taxation on Some Issues concerning
Tax Refund or Exemption on Export Goods
the State
Administration of Taxation¡¡GuoShuiFa [2003] No. 139
November 18,
2003
The
administrations of state taxation of all provinces, autonomous regions,
municipalities directly under the Central Government, cities directly
under state planning, and all entities under the State Administration of
Taxation:
With a view to solving the issues feedback from the regions concerning
the enforcement of export tax refund policies, upon deliberation, we
hereby make the following notice:
I. The
following formula shall be applicable for calculating and
deducting the output tax payable on the taxable goods regarded as
sold in domestic market according to the Measures for Tax Exemption,
Deduction or Refund:
Output tax payable = Offshore price of export goods regarded as
taxable goods sold in domestic market ¡ÁForeign exchange quotation of
Renminbi ¡Á VAT rate Where the export enterprises have made
calculation on the amount of taxes prohibited from exemption or
deduction in the tax exemption, deduction or refund as prescribed on
the aforesaid taxable goods, which are regarded as goods sold in
domestic market and have been changed into cost, they shall be
changed from the cost item into the income item of amount of tax.
The taxable goods regarded as goods sold in domestic market shall
include: Goods for which the relevant certificates of tax refund or
exemption on their export haven''t been fully collected by the
production enterprises within 6 months from the date of applying to
customs for export or for which the formalities of tax exemption,
deduction, or refund haven''t been handled at the tax authorities in
charge as prescribed in the "Circular of the Ministry of Finance and
the State Administration of Taxation on Further Advancing the
Implementation of Measures for Tax Exemption, Deduction and Refund
on Export Goods" (CaiShui [2002] No. 7); and the export goods
enjoying the tax exemption, deduction, or refund and with no
electronic data (excluding the paper-made customs declaration)
declared by the production enterprises, or the export goods with
electronic data but haven''t been declared at the current month by
the enterprises as prescribed in the "Circular of the State
Administration of Taxation on Examination and Verification of the
Export Volume of the Production Enterprises Enjoying Tax Exemption,
Deduction or Refund by Using the Export Data in the "Port Electronic
Law Enforcement System" (GuoShuiHan [2003] No. 95). The export
volumes, for which taxes unpaid shall be paid in the following month
as prescribed in Document GuoShuiHan [2003] No. 95, shall not
include the export volume of the business of commission, agency
factor, or consignment.
The taxable goods regarded as goods sold in domestic market shall
include: Goods for which the relevant certificates of tax refund or
exemption on their export haven''t been fully collected by the
production enterprises within 6 months from the date of applying to
customs for export or for which the formalities of tax exemption,
deduction, or refund haven''t been handled at the tax authorities in
charge as prescribed in the "Circular of the Ministry of Finance and
the State Administration of Taxation on Further Advancing the
Implementation of Measures for Tax Exemption, Deduction and Refund
on Export Goods" (CaiShui [2002] No. 7); and the export goods
enjoying the tax exemption, deduction, or refund and with no
electronic data (excluding the paper-made customs declaration)
declared by the production enterprises, or the export goods with
electronic data but haven''t been declared at the current month by
the enterprises as prescribed in the "Circular of the State
Administration of Taxation on Examination and Verification of the
Export Volume of the Production Enterprises Enjoying Tax Exemption,
Deduction or Refund by Using the Export Data in the "Port Electronic
Law Enforcement System" (GuoShuiHan [2003] No. 95). The export
volumes, for which taxes unpaid shall be paid in the following month
as prescribed in Document GuoShuiHan [2003] No. 95, shall not
include the export volume of the business of commission, agency
factor, or consignment.
The amount of taxes prohibited from exemption or deduction in the
tax exemption, deduction or refund, shall be calculated according to
the formula as prescribed in Document CaiShui [2002] No.7
III. Where a production-oriented enterprise group corporation (or
parent plant) exports goods for its member enterprises (or branches)
as an agent, the enterprise group (or parent plant) may file an
application to the competent taxation authorities for issuance of
the "Certificate of Export as an Agent", and the member enterprises
(or branches) shall implement the methods of tax "Exemption,
Deduction, or Refund".
IV. Where a foreign contracting engineering company, who has the
management right for foreign economic cooperation upon approval by
the relevant departments, and who is not an ordinary VAT taxpayer,
purchases export goods in relation to a foreign contracting project,
the production enterprises supplying goods for it may file an
application to the tax authorities for issuance of Tax Payment
Notice (used specially for export goods) upon the strength of the
certificates (copies) such as the certificate of approval for the
management right of foreign economic cooperation, etc., as provided
by the foreign contracting engineering company. The foreign
contracting engineering company may then, upon the strength of the
Tax Payment Notice (used specially for export goods), common
invoices or special VAT invoices, and other prescribed certificates,
apply for handling tax refund on export goods in relation to the
foreign contracting project to the competent tax authorities.
V. Where a production enterprise within the bonded zones purchases
raw materials, components and parts, etc. from the enterprises
outside the bonded areas, who have the management right of import
and export, and exports them after having processed them into
products, it shall file an application to the competent taxation
authorities for handling tax exemption, deduction or refund upon the
strength of the file bill on exit issued by the customs in the
bonded zones and other prescribed certificates.
Where an enterprise engaging in the processing of the imported
materials in the bonded zones imports raw materials and components
and parts from abroad, it may, upon the strength of the "Bill for
Filing the Imported Goods in the Customs Bonded Zones", go through
the formalities for obtaining the "Certificates of Tax Exemption on
Trade of Processing Imported Materials by Production Enterprises",
etc.
VI. Tax refund or exemption on goods exported through storehouse,
which is supervised by the customs, shall be handled according to
the existing provisions upon the strength of the customs declaration
for export goods (used specially for export tax refund) signed and
issued by the customs or other prescribed certificates.
VII. As to the provisions of Article 3 of the Document CaiShui
[2002] No. 7, that is, "the purchase of raw materials enjoying tax
exemption shall include the purchase of raw materials enjoying tax
exemption from within the country and the import of materials and
components and parts enjoying tax exemption for processing the
imported material", the purchase of raw materials enjoying tax
exemption from within the country refers to the goods enjoying tax
exemption, whose names are listed in the "Interim Regulations of the
People''s Republic of China on Value-added Taxes" and the "Detailed
Rules for the Implementation of the Interim Regulations of the
People''s Republic of China on Value-added Taxes", and other
relevant provisions, and for which the input tax payable cannot be
calculated and deducted as prescribed.
VIII. Where an enterprise is doing a new export business other than
those prescribed in paragraph 2, and paragraph 3 of the present
Article, the method of refunding taxes on monthly basis shall not be
applicable to the amount of tax refundable occurred within 12 months
from the date of occurrence of the first of the export business.
That amount of tax refundable shall be carried forward to the next
term to offset for goods sold in domestic market. After the 12
months, the provisions of Article 9 of the present Circular on small
export enterprises shall be applied, if it is a small export
enterprise. Where the enterprises do not fall within the scope of
small export enterprises, the tax exemption, deduction or refund
thereof shall be handled uniformly by way of calculation on monthly
basis.
In case an enterprise has registered and opened business for over
one year (excluding small export enterprises) and does have the
production capability and has no illegal acts such as tax evasion,
smuggling, or evading or illegally trading in foreign exchange upon
verification by local or municipal tax authorities, the tax
exemption, deduction or refund of its newly occurred business may be
calculated on monthly basis uniformly.
Where a newly established enterprise whose total sales volume of
internal distribution is 5 million Yuan or more, and whose overseas
sales volume accounts for 50% or more of its total sales volume, and
it will face difficulty in case its tax refund is not to be handled
within 12 months from the date of establishment, the tax exemption,
deduction or refund thereof shall be handled by way of calculation
on monthly basis uniformly on the basis of tight control upon the
approval of the administrations of state taxation of provinces,
autonomous regions, and municipalities directly under the Central
Government.
IX. The amount of tax refundable of a small export enterprise, which
is occurred in the middle of the year, and on which the term for
examination and verification of the tax refund is 12 months under
Article 8 of Document CaiShui [2002] No. 7, shall not be handled by
way of refunding taxes on monthly basis, but shall be handled by way
of carrying it forward to the next term to offset for goods sold in
domestic markets. For the part failing to be offset, the tax refund
shall be handled once for all at the end of the year. The standard
for determining the small export enterprises shall be made uniformly
by the administrations of state taxation of all provinces
(autonomous regions, and municipalities directly under the Central
Government) according to the reality of the whole provinces
(autonomous regions, and municipalities directly under the Central
Government), and within the range of 2 million Yuan or more up to 5
million Yuan of the total sales volume of the enterprise in domestic
markets and overseas markets in the previous taxpaying year.
X. The VAT shall be exempted for the export goods of the production
enterprises taxed by simple method. And other goods exported shall
apply the Methods of Tax Exemption, Deduction and Refund.
XI. A small-scale taxpayer, who entrusts other processing
enterprises to undertake the business of processing with materials
provided, may file an application to the tax authorities for
issuance of "Certificate of Tax Exemption on Processing with
Materials Provided" according to the relevant provisions in
existence. And the processing enterprises may go through the
formalities for tax refund on processing fees upon the strength of
the "Certificate of Tax Exemption on Processing with Materials
Provided".
XII. Where an enterprise with foreign investment who is not a VAT
taxpayer, or who is a small scale taxpayer, or who is established in
the bonded zones, purchases home-made equipment, which is in
conformity with the relevant provisions under the "Circular of the
State Administration of Taxation concerning Printing and
Distributing the ''Trial Measures for the Administration of Tax
Refund on Home-Made Equipment Purchased by Enterprises with Foreign
Investment''" (No. GuoShuiFa [1999] No. 171), its tax refund may be
handled in accordance with the relevant provisions.
XIII. Where an
enterprise with foreign investment entrusts other
enterprises to undertake the construction of a project by way of
contracting for labor and materials, it may sign an agreement with
the enterprise engaging in the construction and entrusts it to
purchase the kinds of home-made equipment in conformity with the
relevant provisions of Document GuoShuiFa [1999] No. 171. The
enterprise engaging in the construction shall then, upon the
strength of the entrustment agreement for purchase of the home-made
equipment and the "Handbook for Registration of Home-Made Equipment
Purchased by Enterprises with Foreign Investment", purchase the
home-made equipment, and obtain the special VAT invoices and the Tax
Payment Notice (used specially for export goods) for value-added
taxes, and hand them over to the enterprise with foreign investment
to handle tax refund pursuant to relevant provisions.
XIV. The
present Circular shall enter into force as of January 1,
2003. |
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