(Promulgated on June 15, 1989, No 269)

(Promulgated on June 15, 1989, No 269) Whole Doc.

With a view to implementing correctly the policy of tax reimbursement for export products, and resolving problems existing in the present work, these Provisions are formulated as a supplement to specific provisions regarding the tax reimbursement for export: Article 1 The tax shall not be reimbursed for those products which the State forbids to export in cases where they are exported.

Article 2 For products reexported after processing with imported materials or parts, the following provisions shall be followed in calculating the tax reimbursement: (1) For products reexported after processing which are subject to the imposition of Value Added Tax (VAT), the amount of tax deducted already on the imported materials or parts during the production period shall be deducted from the tax base when the tax reimbursement is calculated.

(2) For products reexported after processing which are subject to the imposition of product tax and reimbursed at the comprehensive rate of tax reimbursement, the amount of tax reduced or exempted already on the imported materials or parts upon the importation shall be deducted from the tax base. When the tax reimbursement is calculated; for products which are subject to the imposition of product tax but reimbursed at the rate of product tax, the amount of tax reduced or exempted already on the imported materials or parts shall not be deducted from the tax base when the tax reimbursement is calculated.

(3) The following formula shall be used for deducting the tax reduced or exempted already on the imported materials or parts: Tax deducted = (CIF of imported materials or parts X official exchange rate + duty actually paid + product tax or VAT actually paid + expenses at the port) x the applicable rate of product tax or the deduction rate of VAT for imported materials or parts - product tax or VAT actually paid upon importation.

(4) The amount of tax reduced or exempted on imported materials or parts used for processing the reexport products shall, in principle, be deducted at a single time upon handling the tax reimbursement during the month of purchasing materials or parts. Where there are difficulties for an individual company to be deducted at a single deduction because of large quantity of imported materials or parts involved and long production runs, the tax may be deducted by stages based on the actual situations upon the approval of a tax authority in charge of tax reimbursement for export.

(5) Where imported materials or parts are used for packing export products or processed into packings to export by a foreign trade packing company, the amount of product tax or VAT reduced or exempted on such imported materials or parts upon importation shall be deducted from the tax base when the tax reimbursement is calculated.

Article 3 For export products which use products free of tax or with low tax as raw materials, the rate of tax reimbursement shall be checked and ratified by each locality according to the actual tax paid on the products, thereby calculating the tax reimbursement. In case a foreign trade company fails to provide the relevant documents not its tax paid actually is unclear, the rate of not more than 5 percent shall be followed in calculating the tax reimbursement.

Article 4 The tax reimbursement shall not be given in cases where a company contracting projects overseas purchases home-made equipment used for construction abroad.

Article 5 Where products are exported by a company combining production with foreign trade and a foreign-trade company on a mutual-trust basis, a Certificate of Agency Export Products shall be provided when applying for tax reimbursement. Where a principal entrusts more than 2 companies to handle jointly the export, every company entrusted shall make out its Certificate of Agency Export Products.

The Certificate of Agency Export Products can be used as the credential for handling the tax reimbursement only after it is examined and sealed by the tax bureau in the city or county where the company entrusted is located.

Article 6 For products which are exported through an agent, the tax reimbursed shall be returned to the company which bears the responsibility of profits and losses for export.

For agency export business done together by a principal and an agent under the over-all-rationing system of export profits and losses, the tax reimbursed may be returned to the agent if is clearly provided for, and the principal shall not apply for the tax reimbursement.

Article 7 For products exported by joint operations of more than 2 companies, the company which is responsible for applying to Customs shall go to the tax bureau in the place where it (the Company) is located to handle the tax reimbursement; with the invoice of purchase, invoice of export, Customs declaration and other certificates.

Article 8 Where an export company purchases products for export from a productive company, it shall provide the invoice issued by the productive company for applying for the tax reimbursement; where export products are allotted from the departments of foreign trade and companies thereunder, the original purchase price and expenses shall be listed out clearly in the allocation list at each phase of allocation; a tax bureau may decide the deduction rate of expense according to the above-mentioned evidences provided by a foreign-trade company (including a company combining production with foreign trade). Where an export company purchases products from a commercial or non productive company, the tax reimbursed shall be calculated at the deduction rate of expense- as a base less than 15 percent shall be used for no calculating the tax reimbursement, whichever fails to provide the invoice issued by a productive company. Where the purchase price of export products provided by the export company is obviously higher than the factory price of the productive company, the tax authority in charge of import and export tax reimbursement shall have the power to examine and decide the amount of tax reimbursement based on the actual situations.

Where a foreign ship supplying a company handles the tax reimbursement, the foregoing provisions shall be followed in calculating the price and expense of the products to be reimbursed.

Article 9 An export company shall provide materials and documents relating to the tax paid (on products and etc.) when a tax authority checks and ratifies the rate of product tax reimbursement or the deduction rate of expense. If a tax authority handling this matter needs to verify the documents provided, it may make an investigation by the way of letters or other forms with the tax authority of the locality where the productive company is located, the tax authority concerned shall provide its assistance.

Article 10 The time of reimbursing the tax for export products shall be decided both in accordance with the time of selling such export products and accounting period. If there is any change in the provisions concerning the tax reimbursement for export products, the implementing time shall follow these Provisions.

Article 11 These Provisions shall come into force on July 1, 1989. In case where previous provisions contradict; these Provisions shall prevail.

vided for, and the principal shall not apply for the tax reimbursement.

Article 7 For products exported by joint operations of more than 2 companies, the company which is responsible for applying to Customs shall go to the tax bureau in the place where it (the Company) is located to handle the tax reimbursement; with the invoice of purchase, invoice of export, Customs declaration and other certificates.

Article 8 Where an export company purchases products for export from a productive company, it shall provide the invoice issued by the productive company for applying for the tax reimbursement; where export products are allotted from the departments of foreign trade and companies thereunder, the original purchase price and expenses shall be listed out clearly in the allocation list at each phase of allocation; a tax bureau may decide the deduction rate of expense according to the above-mentioned evidences provided by a foreign-trade company (including a company combining production with foreign trade). Where an export company purchases products from a commercial or non productive company, the tax reimbursed shall be calculated at the deduction rate of expense- as a base less than 15 percent shall be used for no calculating the tax reimbursement, whichever fails to provide the invoice issued by a productive company. Where the purchase price of export products provided by the export company is obviously higher than the factory price of the productive company, the tax authority in charge of import and export tax reimbursement shall have the power to examine and decide the amount of tax reimbursement based on the actual situations.

Where a foreign ship supplying a company handles the tax reimbursement, the foregoing provisions shall be followed in calculating the price and expense of the products to be reimbursed.

Article 9 An export company shall provide materials and documents relating to the tax paid (on products and etc.) when a tax authority checks and ratifies the rate of product tax reimbursement or the deduction rate of expense. If a tax authority handling this matter needs to verify the documents provided, it may make an investigation by the way of letters or other forms with the tax authority of the locality where the productive company is located, the tax authority concerned shall provide its assistance.

Article 10 The time of reimbursing the tax for export products shall be decided both in accordance with the time of selling such export products and accounting period. If there is any change in the provisions concerning the tax reimbursement for export products, the implementing time shall follow these Provisions.

Article 11 These Provisions shall come into force on July 1, 1989. In case where previous provisions contradict; these Provisions shall prevail.