(Ministry of Finance: 18 January 1993, Code Finance and Taxation[93] No. 002)

(Ministry of Finance: 18 January 1993, Code Finance and Taxation[93] No. 002) Whole Doc.

To the tax bureaus of various provinces, autonomous regions and municipalities, tax bureaus of various cities with separate planning, sub-bureaus of offshore oil tax administrative bureaus: In order to meet the needs of opening to the outside world and give expression to the principle of fair tax burden and facilitate the development of foreign-funded enterprises, after study, the following stipulations are hereby worked out on the tax items and tax rates of consolidated industrial and commercial tax on the textiles produced by enterprise with foreign investment as well as related issues: I. Readjusting the tax items and tax rates for textiles. for the readjusted tax items and tax rates (see Appendix).

II. Intermediate products manufactured by the enterprise with foreign investment itself and are used in the production of the enterprise are exempt from tax. In order to balance the tax burden of single weaving factory and comprehensive factory, with regard to the other wool textiles produced with the purchased, already taxed, wool yarn and knitting wool, consolidated industrial and commercial tax may be levied at 5 percent in accordance with the stipulations on the same tax item for processed and remade products; On the wool knitted textiles, wool replicas, fake fur and other textiles produced with purchased, already taxed, wool yarn, knitting wool, cotton yarn, cotton-type chemical fiber yarn, ramie yarn, natural silk, and chemical fiber, consolidated industrial and commercial tax may be levied at a 50 percent reduction of the payable tax.

III. As regards the question concerning to what tax category do the readjusted textiles belong, it should be implemented in accordance with the annotations on the tax items of VAT issued by the State Administration of Taxation.

IV. This notice goes into effect on January 1, 1993.

Appendix: Readjustment Table on the Tax Items and Tax Rates of Consolidated Industrial and Commercial Tax on Textiles Appendix: Readjustment Table On the Tax Items and Tax Rates of Consolidated Industrial and Commercial Tax on Textiles ------------------ Tax Items Tax Rates ------------------ Chemical fiber 5% ------------------ Textiles (1) Wool textiles Wool stripes 5% Wool knitted fabrics, wool fabrics, fake fur 7% Other wool textiles 12% (2) Other textiles 5% ------------------