INTERIM REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON STAMP TAX

INTERIM REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON STAMP TAX (Adopted by the Ninth Executive Meeting of the State Council onJune 24, 1988 and promulgated by Decree No. 11 of the State Council of thePeople's Republic of China on August 6, 1988, and become effective as ofOctober 1, 1988) Important Notice: This English document is coming from the "LAWS AND REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA GOVERNING FOREIGN-RELATED MATTERS" (1991.7) which is compiled by the Brueau of Legislative Affairs of the State Council of the People's Republic of China, and is published by the China Legal System Publishing House.

In case of discrepancy, the original version in Chinese shall prevail.

Whole Document INTERIM REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON STAMP TAX
(Adopted by the Ninth Executive Meeting of the State Council on June 24, 1988 and promulgated by Decree No. 11 of the State Council of the People's Republic of China on August 6, 1988, and become effective as of October 1, 1988) Article 1 All units and individuals who execute or receive, within the territory of the People's Republic of China, documents in the categories specified in these Regulations shall be taxpayers subject to stamp tax (hereinafter referred to as "taxpayers"), and shall pay stamp tax in accordance with the provisions of these Regulations.

Article 2 The following categories of documents shall be taxable documents: (1) contracts or documents in the nature of a contract with regard to: purchases and sales, the undertaking of processing, contracting for construction projects, property leasing, commodity transport, warehousing, loans, property insurance, technology; (2) documents for transfer of property rights; (3) business account books; (4) certificates evidencing rights or licences; and (5) other documents that are taxable as determined by the Ministry of Finance.

Article 3 According to the nature of the taxable document, taxpayers shall calculate the amount of tax due on the basis of a flat tax rate or a fixed amount per document. Determination of the specific tax rate or amount of tax shall be made with reference to the Schedule of Tax Items and Tax Rates accompanying these Regualtions.

No stamp tax shall be due where the amount of tax payable does not exceed one jiao. Where the amount of tax payable is one jiao or more, an odd amount not exceeding five fen shall not be counted; where the odd amount is five fen or more, the tax shall be calculated as one jiao.

Article 4 The following documents shall be exempt from stamp tax: (1) duplicates or copies of documents on which stamp tax has already been paid; (2) documents executed for the donation of property to the government, social welfare establishments or schools by the property owner; (3) other documents which are exempt from stamp tax with the approval of the Ministry of Finance.

Article 5 Measures for the payment of stamp tax shall be implemented whereby taxpayers shall, in accordance with the provisions, calculate the amount of tax payable and purchase and affix at one time the full corresponding amount of tax stamps (hereinafter referred to as "stamping").

In order to simplify the stamping procedures where the amount of tax to be paid is relatively large or where frequent stamping is necessary, taxpayers may apply to the tax authorities to use a tax payment account instead of stamping, or a periodic payment method.

Article 6 Tax stamps shall be affixed to taxable documents; taxpayers shall cancel each stamp along its border with a seal or a drawn line. Tax stamps that have already been affixed may not be reused.

Article 7 Tax stamps shall be affixed to taxable documents at the time of execution or upon receipt.

Article 8 Where the same document is executed by two or more parties and each party holds a copy, each party shall be responsible for affixing on its own copy the full amount of tax stamps due.

Article 9 Where a document on which tax stamps have already been affixed is amended, resulting in an increase in the value thereof, additional tax stamps shall be affixed on the document in accordance with the amount of such increase.

Article 10 The tax authorities shall be responsible for the administration of the collection of stamp tax.

Article 11 The State Taxation Bureau shall supervise the printing of the tax stamps.

The face value of tax stamps shall be denominated in Renminbi.

Article 12 Units issuing or processing taxable documents shall be responsible for the supervision of taxpayers in respect of the payment of stamp tax in accordance with the law.

Article 13 Where taxpayers are found to have engaged in any of the following, the tax authorities shall impose penalties in light of the seriousness of the case: (1) in the case of a failure to affix tax stamps, or to affix an insufficient amount of tax stamps, on taxable documents, the tax authorities may, in addition to ordering taxpayers to make up the tax stamps, impose a fine equal to twenty times or less the amount of tax stamps due; (2) in the case of a violation of the provisions of Paragraph 1 of Article 6 of these Regulations, the tax authorities may impose a fine equal to ten times or less the amount of the tax stamps that have not been cancelled by a seal or a drawn line; and (3) in the case of a violation of the provisions of Paragraph 2 of Article 6 of these Regulations, the tax authorities may impose a fine equal to thirty times or less the amount of the tax stamps that have been reused.

In a case where tax stamps have been forged, the tax authorities shall submit the matter to the judicial authorities for investigation into criminal liability in accordance with the law.

Article 14 The collection and administration of stamp tax shall, in addition to the provisions of these Regulations, be administered in accordance with the pertinent provisions of the Interim Regulations of the People's Republic of China for Tax Administration.

Article 15 The Ministry of Finance shall be responsible for the interpretation of these Regulations, The rules for the implementation of these Regulations shall be formulated by the Ministry of Finance.

Article 16 These Regulations shall become effective as of October 1, 1988.

Appendix: Stamp Tax Schedule of Tax Items and Tax Rates |================|==================|==========|==========|=======| |Tax Item |Scope |Tax Rate |Tax Payer |Remarks| |================|==================|==========|==========|=======| |1. purchases |including con- |0.03% of |parties to| | and sales |tracts for supp- |the value |the | | contracts |ly, advanced |of the |contract | |sales, institu- |purchase | | |tional pur- |or sale- | | |chases, combin- | | |ed purchase and | | |cooperative | | |manufacturing, | | |assembly com- | | |pensation trade, | | |barter, and so | | |on. | | |----|-----|---|---|--| |2. processing |including con- |stamping |parties to| | contracts |tracts for pro- |as 0.05% |the | |cressing, special |of the in-|contract | |orders, repair |come | | |and renovation, |from pro- | | |overhaul, print- |cessing or| | |ing, advertising, |contract- | | |surveying, |ing | | |testing and so | | |on. | | |----|-----|---|---|--| |3. survey and |including con- |0.05% of |parties to| | design con- |tracts for survey |receipts |the | | tracts for |and design |contract | | engineering | | | | and construc-| | | | tion projects| | | |----|-----|---|---|--| |4. construction |including con- |0.03% of |parties to| | and installa-|tracts for con- |the con- |the | | tion project |straction and in- |tracted |contract | | contracts |stallation |amount | | |undertaking | | |----|-----|---|---|--| |5.property leas-|including con- |0.1% of |parties to| | ing contracts |tracts for leasing|the lease |the | |of buildings, |amounts |contract | |vessels, aircraft,|less than | | |motor vehicles, |one yuan | | |machinery, ap- |to be | | |pliances and |stamped | | |other such |as one | | |equipment |yuan | | |================|==================|==========|==========|=======| |=================|=================|=========|==========|=================| |Tax Item |Scope |Tax Rate |Tax Payer |Remarks | |=================|=================|=========|==========|=================| |6. goods |including con- |0.05% of |parties to|where the | | transporta- |tracts for civil |the |the |documents are | | tion contracts|aviation, railway|transpor-|contract |used as con- | |transportation, |tation |tracts, stamping | |maritime |fees |shall be made to | |transportation, | |the documents | |inland water- | |as in the case of| |ways, overland | |contracts | |and through | | |transportation | | |-----|-----|---|---|-----| |7. warehousing |including con- |0.01% of |parties to|where ware- | | and safekeep- |tracts for |the ware-|the |housing or | | ing contracts |warehousing |housing |contract |safekeeping | |and safekeeping |and |receipts are used| | |safekeep-|as contracts, | | |ing fee |stamping shall | | | |be made to the | | | |documents as in | | | |the case of | | | |contracts | |-----|-----|---|---|-----| |8. contracts for | including con- |0.005% of|parties to|if documents are | | loan | tracts for loan |the loan |the |used as con- | | entered by |amount |contract |tracts, stamping | | banks and other | |shall be made to | | financial | |the documents | | organizations | |in the case of | | and borrowers | |contracts | | except interbank| | | loan agreements | | |-----|-----|---|---|-----| |9. property in- | including in |0.003% of|parties to|if documents are | | surance | surance con- |the |the |used as con- | | contracts | tracts for pro- |amount |contract |tracts, stamping | | perty, bonding, |insured |shall be made to | | guarantee, sure-| |the documents | | ty and credit | |as in the case of| | undertakings | |contracts | | and so on | | |-----|-----|---|---|-----| |10. technology | including con- |0.03% of |parties to| | contracts | tracts for |the in- |the | | technology |dicated |contract | | development |amount | | | and transfer, | | | consulting, ser-| | | vice, and so on | | |=================|=================|=========|==========|=================| |===============|==================|=============|============|========| |Tax Item |Scope |Tax Rate |Tax payer |Remarks | |===============|==================|=============|============|========| |11. property |including |0.05% of |parties ex- | | transfer |transfer |the amount |ecuting the | | documents |documents for |indicated |document(s) | |property owner- | | |ship and | | |copyrights, | | |trademark | | |rights, patents, | | |the right to the | | |use of pro- | | |prietary | | |technology and | | |so on | | |----|-----|-----|----|--| |12.business |account books |account |business ac-| | accounting |used for produc- |books for |counting | | documents |tion and |recording |entities | |business |funds: 0.05% | | |operations |of the total | | | |amount of | | | |the original | | | |value of fix-| | | |ed assets | | | |and self- | | | |owned | | | |working | | | |capital; | | | |other ac- | | | |count | | | |books: 5 | | | |yuan for | | | |each | | |----|-----|-----|----|--| |13.certificates|including cer- |5 yuan per |receiver(s) | | and licences|tificates of title|document |of the | |for buildings, |document(s) | |business | | |licences for in- | | |dustry and com- | | |merce, cer- | | |tificates for | | |registration of | | |trade-marks, cer- | | |tificates of | | |patents, and | | |land use | | |certificates | | |===============|==================|=============|============|========| Note: According to the interpretation of Rules for the Implementation of the Interim Regulations of the People's Republic of China on Stamp Tax, promulgated by the Ministry of Finance on September 29, 1988, the Interim Regulations of the People's Republic of China on Stamp Tax shall also apply to Chinese-foreign Equity joint ventures. Chinese-foreign contractual joint ventures, foreign-capital enterprises, foreign companies, enterprises and other economic organizations as well as their resident offices in China. -The Editor.