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(1) Taxpayers
The VAT taxpayers include any enterprise, unit and other individual
engaged in sales of goods, importation of goods, provision of services
of processing, repairs and replacement (hereinafter referred to
as 'taxable services' in short) within the territory of the People's
Republic of China.
(2) Taxable items and tax rates
Table of VAT Taxable Items and Rates
| Coverage of collection
|
Rates |
| Exportation of goods
(except otherwise stipulated by the State) |
0% |
| 1. Agriculture,
forestry, products of animal husbandry, aquatic products; 2.
Edible vegetable oil and food grains duplicates; 3.Tap water,
heating, cooling, hot air supplying, hot water, coal gas, liquefied
petroleum gas, natural gas, methane gas, coal/charcoal products
for household use; 4.Books, newspapers, magazines (excluding
the newspapers and magazines distributed by the post department);
5.Feeds, chemical fertilizers, agricultural chemicals, Agricultural
machinery and plastic covering film for farming; 6.Dressing
metal mineral products, dressing non-metal mineral products,
coal. |
13% |
| Crude oil, mine salt
and goods other than those listed above, and services of processing,
repairs and replacement. |
17% |
(3) Computation of tax payable
a. Normal taxpayers
To compute the VAT payable, the normal taxpayers need to separately
calculate the output tax and the input tax for the current period.
Then the difference between the output tax and the input tax shall
be the actual amount of VAT payable.
The formula for computing the tax payable is as follows:
Tax payable = Output tax payable for the current period - Input
tax for the current period
Output tax payable = Sales volume in the current period กม Applicable
tax rate
b. Small taxpayers
Small taxpayers are taxed on the basis of the revenue derived from
sales of goods or provision of taxable services by applying proper
rates (4% for commercial sector, and 6% for other sectors). The
computing formula is:
Tax payable = Sales amount กม Applicable rate
c. Importation
The imported goods are taxed on the basis of the composite assessable
price by applying the applicable tax rate.
d. VAT refund for exporters
In case of 0% rate applicable to the exported goods, the exporters
may apply to the tax authorities for the input tax refund on those
goods exported. At present, the refund rates consist of 5%, 6%,
9%, 11%, 13% and 17%.
(4) Tax exemptions
The exempted items include: self-produced primary agricultural
products sold by agricultural producing units and individuals; imported
goods being processed for exportation; the self-use equipment imported
out of the total investment for the projects with foreign investment
or domestic investment which are encouraged by the State; contraceptive
medicines and devices; antique books purchased from the public;
instruments and equipment imported for direct use in scientific
research, experiment and education; imported materials and equipment
granted by foreign governments or international organizations; articles
imported directly by organizations for the disabled for exclusive
use by the disabled.
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