(The State Administration of Taxation: December 28 1993 Guo ShuiFa [1993] No. 157)

(The State Administration of Taxation: December 28 1993 Guo ShuiFa [1993] No. 157) Whole Doc.

To the tax bureaus of various provinces, autonomous regions and municipalities directly under the central government, tax bureaus of various cities with separate planning, tax bureaus of Shenyang, Changchun, Harbin, Nanjing, Wuhan, Chengdu, Xian and Guangzhou: With approval from the State Council, the Ministry of Finance promulgated on December 23, 1993 the Methods of the People's Republic of China for the Management of Invoices (hereinafter referred to as Methods).

In order to make the Methods more operational and easy for implementation and unfolding publicity, in light of the authority granted by the Methods, the State Administration of Taxation has formulated the Detailed Rules for the Implementation of the Methods of the People's Republic of China for the Management of Invoices (hereinafter referred to as Detailed Rules), and has compiled the Publicity Outline for the Methods of the People's Republic of China for the Management of Invoices (hereinafter referred to as Publicity Outline). The Methods, along with the Detailed Rules and Publicity Outline, are hereby transmitted to you. The Notice on related issues concerning implementation of the Methods is given as follows: I. Enhancing understanding and strengthening leadership. The Methods are China's first set administrative regulations on the management of invoices published with the approval of the State Council. Its promulgation marks a new stage in the standardization and legalization of the management of China's invoices. It unifies China's current invoice management system, strengthens the functions of tax authorities over invoice management, standardizes the procedures for invoice management, increases the dynamics of punishment of law-breaking acts related to invoices, imposes strict restraint on the tax authorities' exercise of functions and powers, and embodies the protection of the legal rights and interests of the units and individuals who print and use invoices. This not only helps further improve the legal system for tax collection and management, conscientiously strengthen the work of invoice management and give a better place to the functions of taxation supervision and control, but also helps maintain the market economic order, promote fair competition, and boost reform, opening up and the sustained, rapid and sound development of economic construction. Therefore, tax authorities at all levels and the vast number of taxation cadres must heighten their understanding and unify their thinking; they should not only see the important significance of the promulgation of the Methods to the strengthening of tax collection and management and to raising the level of invoice management, but should also fully realize its important role in the establishment of the socialist market economic structure. The various localities should regard implementation of the Methods as a major event and pay close attention to it, conscientiously strengthen leadership, step up formulation of concrete opinions and measures for its implementation and promptly report to local Party and government leadership and communicate with related departments, so as to facilitate support and coordination among various quarters and ensure the solid and effective proceeding of this work.

II. Conscientiously organizing study and training and unfolding extensive publicity and education. Tax authorities in various localities should actively organize forces, pay earnest and close attention to the study, training and publicity of the Methods and Detailed Rules. In line with the plan of the State Administration of Taxation and in combination with the Law for Tax Collection and Management and the study, training and publicity of the new tax system, selectively organize invoice-training classes, organize the vast number of taxation cadres and the units and individuals who engage in the printing and use of invoices to conscientiously study the Methods and Detailed Rules, grasp their basic spirit and contents, clearly define their respective rights and duties and make proper preparation for the implementation of the Methods and Detailed Rules. At the same time, it is necessary to make full use of such publicity media as broadcast, TV, newspapers and magazines as well as various publicity means, unfold extensive and intensive publicity and educational activities, so as to increase society's understanding of the regulations on invoice management, strengthen the public's sense of using invoices according to law, intensify social supervision over the invoice field, thereby laying a solid mass foundation for improving the quality of invoice management.

III. Establishing and perfecting the invoice management system. In accordance with related stipulations of the Methods and Detailed Rules, tax authorities at all levels should, in light of concrete conditions, conduct conscientious liquidation of the original invoice management system, abolish and revise what should be done so, and re-establish a system where it should be done so, thereby establishing and improving various management systems related to the printing, the production cost and management fees of invoices, the earnest money of invoices, and the various management systems related to the purchase, use and preservation of invoices, so as to form a comprehensive legal system for invoice management, so that there will be rules to go by in every link related to invoice management.

IV. Enforcing strict management of invoice printing and constantly improving anti-fake measures. In selecting enterprises which engage in the printing of invoices, it is necessary to strictly follow the qualifications and standards set in the Methods and Detailed Rules, uphold the principle of centralization and unification, introduce the competition mechanisms, select and fix points through invitation and submission of bids. Relevant management systems must be established according to stipulations in designated printing enterprises, strengthen supervision and check; with regard to those printing enterprises which do not earnestly correct the problems that have cropped up, their qualifications for printing invoices should be promptly annulled, so as to ensure the printing quality and the requirements for the supply of invoices. At the same time, to deal with the outstanding problems such as the deluge of false invoices, the disruption of economic order and the corruption of social morality, it is necessary to make full use of advanced anti-fake technology and equipment, implement anti-fake measures by issuing unified national invoices, strengthen comprehensive anti-fake properties of invoices, and reduce and eventually eradicate the danger brought about by the chronical malady of false invoices.

V. Carrying out close coordination between departments, concentrating efforts on attack against serious law-breaking crimes in the field of invoices. The promulgation of the Methods and Detailed Rules has provided a legal basis for further attacking law-breaking acts related to invoices.

While strengthening supervision and examination of various links regarding the purchase, receiving, use and preservation of invoices, the tax authorities in various localities should lose no time to pay attention to the coordination and collaboration between departments such as public security and procuratorial departments and law courts, and administrative departments for industry and commerce, purposefully launch special struggles in key areas against illegal criminal activities such as unauthorized printing, selling, illegal trading, forging and faking invoices. Those whose cases are serious and constitute crimes shall be timely transferred to judicial organization and punished, so as to ensure the smooth implementation of the tax withholding system under which VAT will be clearly noted in accordance with the invoices effective on January 1, next year, propel the correct implementation of the Methods and bring about a still better market economic order.

VI. Questions concerning the linkage between the old and new regulations. In line with the stipulations of the Methods and Detailed Rules, the Interim Methods for the Management of the Nation's Invoices (hereinafter referred to as the Original Methods) promulgated by the Ministry of Finance on August 19, 1986 and the Interim Regulations on the Management of Invoices Related to Foreign-Funded Enterprises and Foreign Enterprises (hereinafter referred to as the Original Regulations) promulgated by the original State Administration of Taxation on December 27, 1991, shall be abolished from the day of the publication of the Methods. With regard to the handling of cases under investigation and treatment or the newly discovered previous illegal cases and illegal acts related to invoices after the day of the publication of the Methods, the Original Methods and the Original Regulations are, in principle, applicable. However, to make things easy for operation, stipulations on such procedural aspects as the handling and reconsideration of cases, the Methods and Detailed Rules are applicable to all of these cases.

VII. Strengthening ties between the upper and lower levels. In order to promptly grasp the situation regarding implementation of the Methods and Detailed Rules, tax authorities in various localities should assign someone to be in charge, send us a timely feedback situation regarding the locality's publicity and implementation and existing problems, so as to facilitate unified study, coordination and solution of these problems; tax bureaus of various provinces, autonomous regions and municipalities directly under the central government and tax bureaus of cities with separate planning shall report their invoice management systems and measures to the State Administration of Taxation for the record. Prior to the establishment of two sets of separate tax organizations, the invoice management work shall be placed under centralized and unified management in accordance with the current system.

The various points mentioned above shall be conscientiously carried out in light of local actuality.

Appendices: I. Detailed Rules for the Implementation of the Methods of the People's Republic of China for Invoice Management.

II. The Publicity Outline on the Methods of the People's Republic of China for Invoice Management Appendix: 1 Detailed Rules for Implementation of the Methods of the People's Republic of China for Invoice Management CHAPTER I General Provision Article 1 These detailed rules for implementation are hereby for mulated in accordance with the stipulations of Article 44 of the Methods of the People's Republic of China for Invoice Management (hereinafter is referred to as the Methods).

Article 2 The seal used for supervising the manufacture of the nation's unified invoices is the legal indication of the tax authorities' management of invoice, its shape, specification, content and color are determined by the State Administration of Taxation. With the exception of approval granted by the State Administration of Taxation or by the branches of the State Administration of Taxation in various provinces, autonomous regions and municipalities directly under the central government and by tax bureaus of various provinces, autonomous regions and municipalities (the State Administration of Taxation, the branches of the State Administration in various provinces, autonomous regions and municipalities and local tax bureaus of various provinces, autonomous regions and municipalities are hereinafter referred to as provincial-level tax authorities) in accordance with their respective responsibilities, invoices should all be printed with the seal for supervising the manufacture of unified national invoices.

Article 3 The classification of the categories of invoices shall be determined by tax authorities at or above the provincial level.

Article 4 Invoice basically consists of triplicate forms, the first form is the invoice stub, the invoice maker retains the stub for future reference; the second form is the invoice form, the receiver uses it as the primitive voucher for paying or receiving money; the third form is the form for keeping accounts, the drawer uses it as a primitive voucher for keeping account.

The basic forms of special-purpose invoices for VAT should also include the deducting form, the invoice receiver uses it as a voucher for deducting tax money.

In addition to the special invoices for VAT, tax authorities at or above the county (city) level may increase or decrease the number of invoice forms in light of needs and determine their uses.

Article 5 The basic contents of invoice include name of invoice, track and number of word, the number and uses of invoice form, the client's name, the bank of deposit and account number, the name of commodities and the project of business, measurement unit, quantity, unit price, amounts in words and figures, the drawer, the date of making out an invoice, the name (signature) of a unit or individual who makes out the invoice.

Where there are withholding, collecting and levying taxes on a commission basis, the contents of their invoices should include the rates of taxes withheld, collected and levied on a commission basis and the amounts of taxes withheld, collected and levied on a commission basis.

The special invoices for VAT should also include: the address, tax registration number, the rate and amount of VAT of the goods purchaser, the name, address and tax registration number of the goods supplier.

Article 6 The unified form of invoice used nationwide shall be determined by the State Administration of Taxation.

The unified form of invoice used within the scope of a province, autonomous region or municipality shall be determined by provincial-level tax authorities.

The form of invoice referred to in this Article include the variety of the invoice, the purposes, concrete contents, layout, specification and scope of use of various sheets of invoice.

Article 7 Units which have a fixed production and management site, complete financial and invoice management systems and a large invoice use volume may apply for printing invoice to be printed with the name of their own units; if unified form of invoice cannot satisfy business needs, unit may design invoice forms of their own units, but they must have the approval from tax authorities at or above the county (city) level, of which special invoice for VAT shall be decided separately by the State Administration of Taxation.

CHAPTER II The Printing of Invoices Article 8 "The special invoice for VAT shall be decided separately by the State Administration of Taxation" referred to in Article 7 of the Methods means that invoices are printed exclusively by the enterprise designated by the State Administration of Taxation.

Article 9 Enterprises printing invoices and enterprises producing special products for anti-fake invoices shall possess the following qualifications: (I) Their equipment and technology level can meet the needs of printing invoices and producing special products for anti-fake invoices; (II) Capable of guaranteeing supply in compliance with the demands of tax authorities; (III) They have standard enterprise management and strict quality supervision system; (IV) They have a special workshop for production, special warehouse for storage, and special personnel in charge; (V) Capable of strictly abiding by the stipulations on the printing of invoices and the production and management of special products for anti-fake invoices.

Article 10 Invoice printing permit and permit of the production of special products for anti-fake invoices shall be formulated and issued exclusively by the State Administration of Taxation.

Tax authorities should regularly conduct supervision and examination of enterprises printing invoices and enterprises producing special products for anti-fake invoices, with regard to those who fail to meet the requirements, the tax authorities should disqualify them to print invoices and produce special products for anti-fake invoices.

Article 11 Enterprises printing invoices and enterprises producing special products for anti-forged invoices shall establish the following systems: (I) Production responsibility system; (II) Secrecy system; (III) Quality inspection system; (IV) Custodian system; (V) Other related systems.

Article 12 Before the printing of invoices or the production of special products for anti-forged invoices, the competent tax authorities should issue a notice concerning the printing of invoices or the production of special products for anti-forged invoices. Enterprises designated to print or produce shall perform such task in compliance with the requirements.

The notice on the printing of invoices shall include clearly stated name of the invoice-printing enterprise, the name of the user, name, category, the sheet number, specification, color of invoice, the printed quantity, start-stop numbers, and the time and place of delivery.

The notice concerning the production of special products for anti-forged invoices shall include such contents as the name of clearly state enterprises producing special products for anti- forged invoices, the name of special products for anti-forged invoices, major technical indices and quality requirements and annual planned output.

Article 13 The finished products completed by enterprises printing invoices and enterprises producing special products for anti-forged invoices, as well as special products for anti-forged invoices purchased by invoice-printing enterprises shall be properly stored in special warehouse after being checked and accepted in accordance with stipulations, and shall not be lost. Substandard and waste products shall be reported to tax authorities for approval and be destroyed in a concentrated way.

Article 14 The specific time, content and request of changing the printing plate at indefinite intervals shall be determined by the state Administration of Taxation.

CHAPTER III Receiving and Purchase of Invoices Article 15 Units which do not need to perform tax registration according to law but need to receive and purchase invoices may, in line with related stipulations of the Methods, apply to competent tax authorities for receiving and purchasing invoices.

Article 16 While unit and individual who apply for receiving and purchasing special invoices for VAT provide certificates stipulated in Article 16 of the Methods, they shall provide the tax registration certificate (duplicate) stamped with the special seal confirming it or him being "ordinary VAT payer". Non-VAT payer and small-scale VAT tax payer confirmed by related stipulations on VAT shall not receive and purchase special invoices for VAT.

Article 17 The tax registration documents mentioned in Article 16 of the Methods refer to tax registration certificates (original and duplicate), and registered tax registration certificates (original and duplicate).

Article 18 The application for the purchase of invoices mentioned in Article 16 of the Methods shall include clearly stated name of the unit and individual, the trade they belong to and the economic type, the category, name, and quantity of the invoices they need and shall be stamped with the public seal of their unit and the seal of the person handling the matter.

Article 19 The ID card mentioned in Article 16 of the Methods refers to the resident ID card, passport, work certificate of the person handling the matter as well as other documents capable of proving the capacity of the person handling the matter.

Article 20 The financial seal mentioned in Article 16 of the Methods refers to the special financial seal of the unit or other financial seals.

Article 21 The special invoice seal mentioned in Article 16 of the Methods refers to the financial seal for the unit which lacks (or finds it inconvenient to use) and the seal carved by an individual industrial and commercial household in accordance with the unified stipulations of tax authorities and stamped with such additional words as its name, tax registration number, special invoice seal used when receiving or drawing up receipts. The form and use method of the "special invoice seal" shall be determined by provincial- level tax authorities.

Article 22 The die of the financial seal and special invoice seal provided by tax authorities for the unit and individual using invoice shall be preserved for reference.

Article 23 The contents of the invoice-receiving and purchasing book mentioned in Article 16 of the Methods shall include the name of the unit and individual using the invoice, the trade they belong to, economic type, the method of invoice purchase, the category of invoice ratified for purchase, the name of invoice, the receiving and purchasing date, the amount approved for purchase, start-stop number, record on breach of rules, signature (seal) of invoice receiver and purchaser, the tax authorities (seal) which verified and issued the invoice.

Article 24 The methods of invoice purchase mentioned in Article 16 of the Methods refer to supply in batch, handing in the old and buying the new or checking the old and purchasing the new.

Article 25 While selling invoices, the tax authorities shall charge production cost and management fees in accordance with the verified and ratified charging standard, and draw up a receipt for the invoice-buying unit and individual. The production cost and management fee shall be regarded as a special fund for special purpose and shall not be diverted to other purposes, provincial- level tax authorities shall formulate a concrete management system.

Article 26 Unit and individual who apply to the tax authorities for drawing up invoices shall all provide written certificates concerning the purchasing and market business and concerning their acceptance of services or other business activities.

With regard to those who should pay tax according to the stipulations of the Tax Law, the tax authorities shall levy tax while drawing up a receipt.

Article 27 The guarantors mentioned in Article 19 of the Methods refers to citizens, corporations or other economic organizations with guaranteeing capability within the territory of China, state organs shall not act as guarantors.

A guarantor who agrees to provide guarantee for the unit and individual receiving and purchasing invoice shall fill out a warranty. The contents of the warranty include: the object, scope, time limit and responsibility of guarantee as well as other related matters.

The warranty takes effect only after it is signed and sealed by the invoice purchaser, guarantor and tax authorities.

Article 28 The "legal responsibility undertaken by the guarantor or by earnest money" mentioned in Clause 2 of Article 19 of the Methods means ordering the guarantor to pay fine or pay fine with earnest money.

Article 29 The concrete scope for providing guarantor or paying earnest money as well as the methods for providing guarantor or paying earnest money related to engaging in temporary business activities by spanning cities and counties within the province, autonomous region and municipality concerned shall be stipulated by provincial-level tax authorities.

CHAPTER IV The Drawing Up and Management of Invoices Article 30 The "invoice drawn up by the payer for the receiver under special circumstance" mentioned in Article 20 of the Methods refers to the invoices drawn up by the purchasing unit and withholding agent while paying personal money.

Article 31 Whether or not the retail sales of small amount of commodities or provision of minor services to individual consumers can be exempt from the drawing up of invoices one by one shall be decided by provincial-level tax authorities.

Article 32 The invoices which do not conform to the stipulations mentioned in Article 22 of the Methods refer to invoices drawn up or gained whose manufacture should but has not gone through the supervision of tax authorities, or the items filled in are incomplete, the contents are untrue, the handwriting is illegible or lacks the stamp of the financial seal or special invoice seal, forged, invalid and other invoices inconsistent with the stipulations of tax authorities.

Article 33 Unit and individual who fill in and draw up invoices shall draw up invoices when business income is confirmed after the occurrence of business management. No drawing up of invoices is allowed before the occurrence of business management.

Article 34 After the drawing up of invoice, in case there is the return of goods already sold which needs the drawing up of red-character invoice, the original invoice must be recovered and the word "invalid" must be clearly stated or effective certificate of the other party should be obtained; when there are discount and allowance for sales, a sale invoice shall be re-drawn up after recovering the original invoice and the word "invalid" is clearly stated.

Article 35 Unit and individual, while drawing up invoice, shall fill in and draw up invoice in accordance with the number order, the items filled in shall be complete, contents shall be real, words legible, all sheets of invoice shall be duplicated, printed in one single time, the contents shall be completely consistent, the financial seal or the special invoice seal shall be fixed in all sheets of the invoice and the withholding sheets.

Article 36 Chinese language shall be used in drawing up invoices. In national autonomous areas a nationality language commonly used in the locality may be used simultaneously. Foreign-funded enterprises and foreign enterprises may simultaneously use a foreign language.

Article 37 The "invoices turned out of computers" mentioned in Article 24 of the Methods refer to invoices printed by enterprises designated to print invoices with the approval from tax authorities and provided for computer to draw up.

Article 38 With regard to those who need to draw up invoices by spanning provinces, autonomous regions and municipalities in accordance with the needs of taxation management, the matter shall be decided by the State Administration of Taxation.

Whether or not neighboring cities and counties in a province are allowed to draw up invoices by spanning provinces, autonomous regions and municipalities shall be determined by provincial-level tax authorities.

Article 39 The specified regions using invoices mentioned in Article 27 of the Methods include the regions stipulated by the State Administration of Taxation and provincial-level tax authorities.

Article 40 The sample and use methods of invoice registration books, as well as the form and time limit related to reports on the use situation mentioned in Article 38 of the Methods shall be determined by provincial-level tax authorities.

Article 41 Unit and individual using invoices shall properly keep the invoices and shall not lose them. Those who lose the invoice shall submit a written report on the day of loss to the competent tax authorities and shall announce and declare its cancellation on such mass media as newspapers, magazines and television.

CHAPTER V The Check Up on Invoices Article 42 The invoice-changing certificate mentioned in Article 33 of the Methods is used only within the scope of the county (city) concerned. When one needs to transfer the invoice out of the county (city) for examination, one shall contact the county (city) tax authorities and use local invoice-changing certificate.

Article 43 Real and false invoices shall be appraised by tax authorities.

Article 44 Unit which receives or keeps the invoice counterfoil shall, within 15 days after receiving the "verification card for filling in the invoice situation" from the tax authorities, fill in the related situation and return it to the department concerned, the pattern of the "verification card for filling in the invoice situation" shall be determined by the State Administration of Taxation.

CHAPTER VI The Rules for Punishments Article 45 In meting out punishment of acts violating invoice management regulations, the tax authorities shall notify the party concerned in written form of the decision on handling the case; they shall place the case on file for investigation and prosecution in regard to violation of invoice management regulations.

Administrative penalty related to violation of invoice management regulations shall be decided by tax authorities at or above the county level; the value of fine or the amount of illegal gain to be confiscated that stands at less than 1000 yuan may be decided by the tax office itself.

Article 46 The following acts belong to conducts of failing to print invoices and produce special products for anti-forged invoices according to stipulations: (I) Enterprises not designated by provincial-level tax authorities but engage in unauthorized printing of invoices; (II) Enterprises not designated by the State Administration of Taxation but engage in unauthorized production of special products for anti-forged invoices, or print special invoices for VAT; (III) Forge or carve seals for supervising manufacture of invoices without authorization, forge or produce special products for anti-forged invoices without authorization; (IV) Enterprises printing invoices fail to print invoices in accordance with the "notice concerning invoice printing" or produce special products for anti-forged invoices in accordance with the "notice concerning the production of special products for anti- forged invoices"; (V) Re-lending or transferring seals for supervising manufacture of invoices and special products for anti-forged invoices; (VI) Enterprises engaging in the printing of invoices and production of special products for anti-forged invoices fail to destroy waste (substandard) products and thus incur losses; (VII) Invoice users printing invoices without permission; (VIII) Formulating a management system for the printing of invoices and production of special products for anti-forged invoices not in accordance with the stipulations of tax authorities; (IX) Other acts of printing invoices and producing special products for anti-forged invoices not in accordance with stipulations.

Article 47 The following acts belong to conducts of receiving and purchasing invoices not according to stipulations: (I) Receiving and purchasing invoices from units and individuals other than tax authorities; (II) Engaging in sales of and illegal trade in invoices without permission; (III) Transporting and sheltering sham invoices; (IV) Providing invoices for or borrowing invoices from others; (V) Stealing (usurping) invoices; (VI) Other acts of receiving and purchasing invoices not according to stipulations.

Article 48 The following acts belong to conducts of drawing up invoices not according to stipulations: (1) Failing to draw up invoices which should be done so; (2) Filling in and drawing up invoice sheets that reveal the contents such as the amount of money in the upper and lower sheet, and the tax value of the sale item for VAT are inconsistent; (3) The items filled in are incomplete; (4) Obliterating invoices; (5) Re-lend, transfer or draw up invoices on a commission basis; (6) Tear off the invoice book and us the invoices without permission; (7) Fabricate business activities, draw up false invoices; (8) Draw up invoices which show the invoice and goods are inconsistent; (9) Draw up invalid invoice; (10) Unauthorized use of invoices drawn up by the region not designated; (11) Make out other documents or blank notes (IOU) instead of invoices; (12) Expand the scope for drawing up special invoices or special-purpose invoice for VAT; (13) Fail to report on the situation regarding the use of invoice in accordance with stipulations; (14) Fail to set up an invoice registration book in accordance with stipulations; (15) Other acts of drawing up invoices in accordance with stipulations.

Article 49 The following acts belong to conducts of obtaining invoices in accordance with stipulations: (1) Fail to obtain invoice which one should obtain; (2) Obtain invoice inconsistent with stipulations; (3) While obtaining invoice, one demands that the invoice maker alter the product name, sum of money or the value of VAT or one does all these on one's own; (4) Fill in or draw up invoices on one's own and enter them into the account book; (5) Other acts of obtaining invoices not according to stipulations.

Article 50 The following acts belong to conducts of not keeping invoices according to stipulations: (1) Lose invoices; (2) Damage (scrap) invoices; (3) Los or scrap the counterfoil and invoice registration book; (4) Hand in invoices for cancellation not according to stipulations; (5) Enterprises which engage in the printing of invoices and production of special products for the anti-forged invoices lose invoices or the seal for supervising manufacture of invoices as well as special products for anti-forged invoices; (6) Establish an invoice-keeping system not according to stipulations; (7) Other acts of keeping invoices not according to stipulations.

Article 51 The following acts belong to conducts of refusing to accept the tax authorities' check-up according to stipulations: (1) Reject examination; (2) Conceal the real situation; (3) Create difficulties for and obstruct tax collectors from conducting examination; (4) Refuse to accept the "invoice- changing certificate"; (5) Refuse to provide related materials; (6) Refuse to provide certificates confirmed by overseas notary organs or registered accountants; (7) Refuse to accept inquiries pertaining to invoices; (8) Other acts of failing to accept tax authorities' examination according to stipulations.

Article 52 The "illegal carrying, mailing, transporting or storing blank invoices" referred to in Article 37 of the Methods include blank invoices manufactured under the supervision of tax authorities and forged false blank invoices.

Article 53 The illegal trade in invoices mentioned in Article 38 of the Methods includes the illegal trade in invoices, the special products for anti-forged invoices and fabricated false invoices.

Article 54 The confiscation of illegal gain mentioned in Article 36, 37, 38, and 39 of the Methods refers to confiscation of the incomes gained from fabrication and illegal printing, production, trade, transfer, agency drawing up of invoices and untruthfully drawing up invoices as well as illegal carrying, mailing, transporting or storing invoices, seals for supervising manufacture of invoices or special products for anti-forged invoices and other acts contrary to the stipulations of these Detailed Rules.

Article 55 Cases concerning tax evasion resulting from violation of invoice management regulations shall be dealt with in accordance with the Law of the People's Republic of China for Tax Management.

With regard to serious cases of violation of invoice management regulations which constitute crimes, tax authorities shall transfer written reports to judicial organs for treatment.

Article 56 The "one may apply to the next higher tax authorities for reconsideration or submit the case to the people's court" mentioned in Article 40 of the Methods refers to that one may apply for reconsideration or submit the case to the people's court in accordance with the time limit and procedures set in the Law of the People's Republic of China for Tax collection and Management.

CHAPTER VII Supplementary Provisions Article 57 The "specialized invoices" mentioned in Article 42 of the Methods refers to the deposit and loan, exchange, account-transfer voucher and insurance vouchers of state-owned financial and insurance enterprises; the postage stamps, mail sheets, telephone service and telegraph receipts; and passenger and cargo tickets handled by state-owned railway and civil aviation enterprises and state-owned highway and water transport enterprises under the communications department.

The specialized invoices used by non-state owned units and individuals who operate the enterprises contracted or leased to them by the above-mentioned units or enterprises owned by the state but operated privately, as well as other invoices of the above- mentioned units shall be chromatographed with the seal for supervising manufacture of unified national invoices and shall be placed under the unified management of tax authorities.

Article 58 The "upper" and "lower" mentioned in both the Methods and the Detailed Rules for Implementation all contain this figure.

Article 59 Illegal acts related to invoices occurred prior to implementation of the Methods shall be dealt with in accordance with the stipulation of the then effective laws, administrative regulations and rules.

Article 60 The rights to interpret these Detailed Rules for Implementation reside in the State Administration of Taxation.

Article 61 These Detailed Rules for Implementation go into effect from the day of the implementation of the Law of the People's Republic of China for Invoice Management. If the original related stipulations of various departments are contradictory to these Detailed Rules for Implementation, the matter should be dealt with in accordance with the Methods and these Detailed Rules for Implementation.

Appendix 2 Publicity Outline for the Methods of the People's Republic of China for Invoice Management In order to strengthen invoice management, intensify tax collection and management and maintain a normal economic order, with approval from the State Council, the Ministry of Finance on December 23, 1993 promulgated the Methods of the People's Republic of China for Invoice Management (hereinafter referred to as Methods). Conscientious study and implementation of the Methods is of great significance in strengthening invoice management and financial supervision, guaranteeing state tax revenues and promoting the establishment and development of the socialist market economic structure.

I. The necessity and importance of formulating the Methods As a basic business voucher in the economic exchange, invoice is a primitive evidence for financial accounting and an important proof for taxation check. Since the founding of New China in 1949, invoice has all along been placed under the unified management of tax authorities. During the 10 chaotic cultural revolution (1966- 76), invoice was regarded as a means for control, check and suppression and was therefore discarded, but was restored after the Third Plenary Session of the 11th Central Committee of the Communist Party of China in December 1978. In 1986, the Ministry of Finance, in line with the stipulation of the Interim Regulations of the People's Republic of China on Tax Collection and Management (hereinafter referred to as Tax Collection and Management Regulations), formulated and promulgated the Interim Methods for National Invoice Management (hereinafter referred to as the Original Methods), on the basis of which, various provinces, autonomous regions and municipalities also formulated concrete methods for implementation and adopted active measures for strengthening invoice management. However, along with the deepening of China's reform and opening and the needs of the transformation of China's economic structure, it is difficult for the Original Methods and measures to fully suit the changed situation: Firstly, it is difficult for the original management means and methods to effectively restrain the illegal acts related to invoices. At present, some units and individuals do not draw up and use invoices according to stipulations, conceal their incomes, exaggerate their production costs, indiscriminately apportion expenses, and evade taxes, these phenomena cannot stopped despite repeated prohibitions; some lawless elements print and sell invoices without authorization, forge, alter and illegally traffic in invoices, they engage in rampant illegal criminal activities by exploiting invoices to cheat export tax reimbursement; smuggle and traffic in smuggled goods and appropriate state property. If this situation is not changed, it will be bound to cause the loss of huge amounts of state financial revenues and seriously upset the market economy order.

Secondly, the original stipulations do not suit the needs of the new tax system that will soon be implemented. In the new tax system that will soon be put into practice in China, the significance and role of invoice will undergo great changes, which will be manifested mainly in the tax withholding system whereby VAT is clearly indicated by means of the invoice. This requires that the special invoice for VAT be regarded as tax bill and kept under strict control, more strict stipulations than the Original Methods should be worked out relating to the various links such as printing, receiving and purchasing, filling in and drawing up.

Thirdly, the original management system was not unified in terms of its dealing with domestically funded and foreign enterprises. The Original Methods were implemented in regard to domestically funded enterprises, while for enterprises with foreign investment and foreign enterprises, the Interim Regulations Concerning Invoice Management Over Enterprises with Foreign Investment and Foreign Enterprises (hereinafter referred to as the Original Regulations) promulgated in 1991 by the State Administration of Taxation. This system is disadvantageous to the further opening to the outside world and to fair competition between domestically funded and enterprise with foreign investment.

Fourthly, the Original Methods are inappropriate with the current basic law for tax collection and management. Along with the promulgation and implementation of the Law of the People's Republic of China for Tax Collection and Management (hereinafter referred to as Tax Collection and Management Law), the Original Methods worked out on the basis of the Tax Collection and Management Regulations were abolished along with the abolition of the Tax Collection and Management Regulations and thus no longer possess legal force. The management of invoices urgently needs to be standardized or readjusted. Considering the changes in the above-mentioned objective situation and the need of management, it is absolutely necessary for the State Council to approve the Methods promulgated by the Ministry of Finance. The Methods are administrative regulations matched with the Tax Collection and Management Law and suiting the requirements of the development of the socialist market economy. Its promulgation market a new stage in the standardization and legalization of China's invoice management work. It has unified China's invoice management system, intensified the invoice management functions of tax authorities, standardized the invoice management procedures, meted out more severe punishment of illegal acts related to invoices, and at the same time imposed more strict control on the law-enforcement acts of tax authorities, further embodying the protection of the legal rights and interests of units and individuals printing and using invoices. This will help improve the legal system for tax collection and management, give fuller play to the supervision and control functions of taxation, maintain the market economy order, serve the reform and opening program and bring about the sustained, rapid and sound development of the socialist economic construction.

II. The Basis and Principles for Formulating the Method The Methods were worked out and promulgated in accordance with the Tax Collection and Management Law, with the stipulations of the Original Methods and the current foreign-related invoice management as the basis, and by combining with the stipulations related to the financial and accounting system and summing up the successful experience gained in the work of invoice management over the past few years and absorbing useful international practices in terms of invoice management.

The following principles are adhered to and abided by in formulating the Methods: (1) Combining the maintenance of the economic order with facilitating commodity circulation. In line with this principle, the Methods concentrate the scope of invoice management on the business voucher which has relatively great effect on the economic and taxation order, that is vouchers on the receipt or payment of cash drawn up or obtained for the purchase and marketing of commodities, providing or accepting labor service as well as in other business activities; while settlement voucher and business charge receipts within enterprises and institutions are no longer included in the scope of invoice management. This facilitates the circulation and accounting of the non-business commodities or products within the enterprise, avoids the repetition and overlapping in invoice management, helps tax authorities to concentrate strength on strengthening management of business vouchers that affect the economic and taxation order.

(2) The combination of centralization and unification with acting in light with local conditions and giving consideration to historical habit.

Centralization and unification is required by strengthening invoice management, however, some specific conditions in various regions and departments need to be treated flexibly, it is necessary to integrate generality and particularity of invoice management. On the basis of this principle, the Methods contain special stipulations related to the specialized invoices of units handling state-owned finance, posts and telecommunications, railways, civil aviation, highways, and water transportation. With approval from the State Administration of Taxation or the tax bureaus of provinces, autonomous regions and municipalities directly under the central government, the departments concerned of State Council or provincial, autonomous regional and municipal people's governments may engage in independent management.

(3) The combination of strengthened management and simplified procedures. While standardizing invoice management procedures and stipulating various measures for strengthening invoice management, the Methods strive to simplify formalities. For example, the Original Methods stipulate that the unit which uses invoice for special needs in business shall bring with it an already designed invoice sample and submit a written report on application for printing invoice to tax authorities.

After its application is approved, it shall have the invoice printed at the designated printing house according to regulations. In this way, the unit using invoice has to design the invoice sample, reports to the higher authorities for approval and contacts the printing shop, this not only involves complicated procedures and many links, but will easily cause the emergence of loopholes. To avoid this, the Methods stipulate that invoice-printing shall be handled exclusively by tax authorities; units using invoice which has to print the name of the unit for special needs in business shall be arranged exclusively by tax authorities, the unit no longer needs to contact the printing house. This can both help reduce the business of the unit using invoice and the links that may cause the emergence of loopholes.

III. The Applicable Scope of the Methods The Method clearly stipulates, "units and individuals who print, receive, purchase, draw up, obtain and keep invoices within the territory of the People's Republic of China must abide by these Methods". In the future, these Methods are applicable to units and individual whether from domestically enterprise with foreign investment, foreign enterprises as well as other units and individuals who come to invest or operate business in China, so long as they print and use invoices.

IV. The Structure and Characteristics of the Methods Structure of the Methods is set up in compliance with the basic requirement of invoice management and in line with the work process of invoice management, i. e., chapters and sections are set up in line with the printing, receiving, purchasing, drawing up, keeping, checking of invoices and punishment related to invoices; the scope of invoices is clearly defined, the various links and activities of the printing, receiving, using, storing and checking of invoices and punishment related to invoices are standardized. This makes things very convenient for tax authorities and units and individuals who print and use invoices to comprehend the basic requirements of invoice management and the operational procedures and under their respective rights (authority), and facilitates the implementation of the regulations on invoice management.

Compared with the regulations on invoice management as set in the Original Methods, the Methods have the following main characteristics: (1) Unifying the internal and external invoice management systems. As supplementary administrative regulations, the Tax Collection and Management Law, the Methods are identical with the Tax Collection and Management in terms of applicable scope, it is applicable to units and individuals of internal enterprises, or enterprise with foreign investment, foreign enterprises as well as other units and individuals who come to invest or operate factories in China. As a result, the practice of using different invoice management systems for internal and external enterprises has become things of the past. This will facilitate the centralized and unified management of invoice, is conducive to the correct implementation of the new tax system, particularly the system of deducting tax by means of invoice for VAT, and help promote fair competition and expand opening to the outside world.

(2) Strengthening tax authorities' functions in invoice management.

In light of the existing problems related to invoice management and the present situation in which tax authorities' functions in invoice management is weakened, the Methods strengthen tax authorities' management functions in the various links of printing, receiving, using, storing and examining invoices and punishment related to invoices. For example, the right to print invoices is concentrated in tax authorities and tax authorities institute a new system wherein units and individuals who come from other provinces, autonomous regions and municipalities to the areas under the jurisdiction of the tax authorities to temporarily engage in business activities shall provide guarantors or guaranty money, tax authorities are granted the right to adopt anti-forged invoice measures and to conduct examination, making this stipulation more concrete. These stipulations will effectively strengthen tax authorities' ability to intensify invoice management.

(3) Standardizing invoice management procedures. As a set of administrative regulations with both physical and procedural legal natures, the Methods lay down strict standards for the management and the managerial acts taken by tax authorities and units and individuals printing and using invoices in various links of printing, receiving, using, storing and inspecting invoices and punishment related to invoices, and clearly define their respective obligations, rights (powers) as well as legal responsibilities which they should undertake.

(4) Increasing punishment of illegal acts related to invoices. The Methods make specific classifications of illegal acts related to invoices, mete out more severe punishment of illegal acts than the original Methods; particularly with regard to acts of unauthorized printing and selling, forging, reshaping of invoices and illegal trading in invoices, the ceiling of fine has been raised from the original 5000 yuan to 50000 yuan, the Methods also set the minimum limit as 10000 yuan, those with two kinds of illegal acts can be punished separately.

(5) Tightening restriction on the law-enforcement acts of tax authorities and strengthening protection of the legal rights and interests of units and individuals printing and using invoices, the Methods stipulate strict procedural control on the law-enforcement acts of tax authorities, so as to ensure the objective, just and correct enforcement of law. At the same time, the Methods grant units and individuals printing and using invoices the litigation right, that is, if they refuse to accept the decision on punishment taken by tax authorities, they may directly sue to the people's court, so as to guarantee the taxation administrative standard in the form of judicial supervision.

V. The Printing Management of Invoices Invoice printing management which is a basic link of invoice management holds a very important position in the entire process of invoice management. Article 14 of the Tax Collection and Management Law makes it clear, "Invoices must be printed by the enterprises designated by the competent tax departments of the provincial, autonomous regional and municipal people's governments; no invoice is allowed to be printed without the authorization of the competent tax departments of the provincial, autonomous regional and municipal people's governments. The methods of invoice management are stipulated by the State Council. The Tax Collection and Management Law sets no concrete stipulations concerning other links related to invoice management, it only sets out specific stipulations on the management of invoice printing, this suffices to show the key role and important significance of the management of invoice printing in the entire invoice management. Therefore, in the spirit of the stipulations of the Tax Collection and Management, the Methods further intensify the management of invoice printing- Firstly, instituting a printing permit system. The Methods stipulate that, the tax bureaus of the provinces, autonomous regions and municipalities should, in line with the principle of centralized printing and unified management, strictly examine the qualifications of the enterprise for printing invoices, and issue invoice printing permits to the enterprises designated to print invoices.

Secondly, using special products for anti-forged invoices. The Methods stipulate that the special products for anti-forged invoices shall be produced by enterprises designated by the State Administration of Taxation. The fabrication and illegal trading in special products for anti-forged invoices are prohibited.

Thirdly, manufacture-supervising seal for chromatolo graphing unified national invoices. The Methods stipulate that invoices should be chomatolographed with the manufacture-supervising seal for unified national invoices. The requirements for the form of the manufacture-supervising seal for unified national invoices and the printing of the layout of the invoice shall be stipulated by the State Administration of Taxation, a system of irregular change in layout shall be instituted, forged invoice manufacture-supervising seal is prohibited.

Fourthly, limiting invoice printing place. The Methods stipulate that the invoices of various provinces, autonomous regions and municipalities shall be printed within the concerned provinces, autonomous regions and municipalities; when there is really the need that invoices must be printed in other provinces, autonomous regions and municipalities, the tax authorities of the provinces, autonomous regions and municipalities shall discuss the matter with the tax authorities of the provinces, autonomous regions and municipalities which are the printing places and obtain their agreement, the invoices shall be printed by the invoice- printing enterprises designated by the tax authorities of the printing places. In order to strengthen the printing management of special VAT invoices, the Methods stipulate that special VAT invoices shall be printed exclusively by the State Administration of Taxation. The printing of invoices abroad is prohibited.

Fifthly, the stipulations concerning the management of printing invoices must be strictly abided by. Enterprises printing invoices shall print invoices in accordance with the pattern and quantity approved by tax authorities; the invoice-printing management system and keeping measures shall be established according to stipulations, the responsibility system of persons in charge of the use and management of invoice manufacture-supervising seals and special products for anti-forged invoices shall be instituted. The language used for printing invoices shall be in Chinese characters. National autonomous areas may print in invoices an additional common nationality characters. Where there is actual need, Chinese and foreign words may simultaneously be used for printing invoices.

VI. The Receipt and Purchase of Invoices The receipt and purchase of invoices are legal invoice procedures obtained by units and individuals using invoices. Standardizing the invoice receiving and purchasing procedures helps tax authorities to strengthen management and makes things convenient for units and individuals to use invoices and reduce the loss of invoices. Therefore, the Methods map out strict standard for invoices receiving and purchasing procedures: Firstly, The following invoice receiving and purchasing procedures are stipulated for units and individuals who perform tax registration according to law: (1) After receiving the tax registration certificate, filing an application for receiving and purchasing invoices at competent tax authorities and at the same time providing the ID card of the person handling the particular matter, tax registration certificate or other related documents as well as the die of financial seal or the special seal for invoices.

(2) After examining and approving the application for receiving and purchasing invoices and related documents, the competent tax authorities shall issue them invoice receiving and purchasing books.

(3) In line with the verified and approved kind, quantity and the method of purchasing invoices as indicated in the invoice receiving and purchasing books, they may receive and purchase invoices at the competent tax authorities.

Secondly, Units and individuals who temporarily engage in business activities outside the province, autonomous region and municipality concerned shall use the certificate issued by the tax authorities where they are located to apply to the tax authorities where they are engaged in business for the local invoices. The tax authorities of the business location may ask them to provide guarantor or to pay guaranty money not exceeding 10000 yuan in accordance with the face value and quantity of the invoice they received and purchased and hand in the invoice for cancellation. For those who hand in the invoice for cancellation on schedule, the obligation undertaken by the guarantor may be relieved or the guaranty money returned; for those who fail to hand in the invoices on schedule, the guarantor shall bear legal responsibility or do so with guaranty money. Tax authorities which charge the guaranty money shall make out a receipt.

Thirdly, an invoice drawing up system is instituted whereby other units and individuals, when need invoices, may directly apply to tax authorities for the drawing up of invoices.

VII. The drawing Up and Keeping of Invoices.

The drawing up and keeping of invoices are the two vitally important links in the management of invoices, they are closely related to the financial management of enterprises and the check and supervision of tax authorities. Therefore, the Methods put down specific stipulations on the different aspects of these two links: Firstly, requirements on the units and individuals drawing up invoices: (1) While receiving payment from foreigners for selling commodities, providing services as well as engaging in other business activities, they shall draw up invoices for the payer. Under special circumstances, the payer draws up invoices for the payee.

(2) In drawing up invoice, one should do this truthfully at one single time in accordance with the time limit, order, column by column and all forms of invoices, and affix the financial seal of the unit or the special invoice seal.

(3) The drawing up of invoice with computer should be approved by tax authorities, external invoices made under the exclusive supervision of tax authorities should be used, the stub form of invoices after drawn up should be bound into a book form.

(4) The drawing up of invoices is limited within the provinces, autonomous regions and municipalities which are the location of the unit and individual receiving and purchasing invoices; those who are engaged in business beyond this scope should draw up invoices of the business location. Tax authorities of provinces, autonomous regions and municipalities may stipulate the method for drawing up trans-city and trans-county invoices.

(5) When there are changes in the content of tax registration by units and individuals who draw up invoices, they shall appropriately perform the procedures of changing the invoices and books for receiving and purchasing invoices; before cancelling tax registration, they shall hand in the book for receiving and purchasing invoices and invoices for cancellation.

Secondly, Requirements on units and individuals who obtain invoices: (1) All units and individuals engaging in production and operation, while paying money for the commodities purchased, acceptance of services as well as engaging in other business activities shall obtain invoices from the payee, but they shall not demand changing the name of and money for the products.

(2) Invoices not conforming to stipulations cannot be used as evidence for submitting an account for reimbursement; any unit and individual have the right to refuse to accept.

Thirdly, Units and individuals shall keep the invoices according to stipulations. Units and individuals who draw up invoices should establish a system of depositing and keeping invoices, set up an invoice registration book and regularly report to tax authorities on the use of invoices; the stub form of invoices already drawn up and the invoice registration book should be kept for five years, after the expiration of the invoice keeping period, they shall report to tax authorities for checking and cremation.

Fourthly, illegal trading in invoices, invoice supervision- manufacture seal and special products for anti-forged invoices by any unit and individual is prohibited; without permission they are not allowed to transcend stipulations to use blank invoices carried, mailed and transported from other regions. The carrying, mailing and transporting blank invoices in and out of the territory are prohibited.

VIII. The Examination of Invoices Invoice examination is a supervision activity related to invoice management stipulations carried out by tax authorities according to law over the printing and use of invoices by units and individuals, and is an organic component of the invoice management system. It is of great importance to ensuring that the units and individuals printing and using invoices strictly abide by invoice management standardization and maintain economic and taxation orders.

The Methods not only clearly define the invoice examination right of tax authorities, but also make it specific and standard, so as to ensure exercise of the invoice examination right and protect the legal rights and interests of the examinee.

Firstly, the Methods clearly define the powers and functions of tax authorities in invoice examination. In invoice examination, tax authorities may exercise the following powers: (1) Examining the situation regarding the printing, receiving, purchasing, drawing up, obtaining and keeping invoices; (2) Having invoices transferred out for examination; (3) Examining and reproducing certificates and materials related to invoices; (4) Inquiring the parties concerned about matters and situation related to invoices; (5) While investigating and handling invoice cases, they may record, tape record, video record, take photos and reproduce cases- related situation and materials; (6) When there is doubt about the invoice or certificate related to tax payment which the examinee obtained from abroad, they may ask the examinee to provide certificate confirmed by overseas notary organs or licensed accountant.

While conducting examination of invoices, tax authorities should perform the following duties: (1) While conducting invoice examination, the examiner should show out taxation inspection certificate; (2) When there is the need to transfer out the drawn up invoice for examination, the examiner should draw up an invoice change certificate.

When there is the need to transfer out blank invoices for examination, the examiner should make out a receipt; the blank invoice, when proved no problem, should be returned immediately.

Secondly, Stipulating the examinee's duties during invoice examination: (1) Accepting examination conducted by tax authorities according to law, accurately reporting the situation, providing related materials, he shall not refuse to accept examination and hide the facts; (2) Providing invoices or evidence and certificates confirmed by overseas notary organs or licensed accountant; (3) Unit which receives invoice or invoice stub form shall accurately fill in the invoice situation checking card issued by tax authorities and return it on schedule.

IX. Punishment of Illegal Acts Related to Invoices Invoice-related illegal act is an act violating the invoice management system and shall be subject to lawful punishment. ARTICLE 48 of the Tax Collection and Management Law stipulates that with regard to those who illegally print invoices, the tax authorities shall recriminate the illegally printed invoices, confiscate their illegal gain and impose fines. In the spirit of this stipulation, the Detailed Rules for Implementation of the Tax Collection and Management Law clearly stipulate that those who provide invoices for the tax payer and withholding agent which results in no or less tax payment or cheating export tax reimbursement, tax authorities, besides confiscating the illegal gains, may impose a less than 100 percent fine for paying no or less tax or cheating tax payment. On the basis of the Tax Collection and Management Law and its Detailed Rules, the Methods further stipulate fines on illegal acts related to invoices.

Firstly, with regard to units and individuals who commit one of the following acts, the tax authorities may order them to correct it within the specified time, confiscate their illegal gains and impose a fine less than 10000 yuan; (1) Printing invoices or producing special products for anti- forged invoices not according to stipulations; (2) Receiving and purchasing invoices not according to stipulations; (3) Drawing up invoices not according to stipulations; (4) Obtaining invoices not according to stipulations; (5) Keeping invoices not according to stipulations; (6) Accepting examination by tax authorities not according to stipulations.

Separate punishments may be meted out on two or more of the above-mentioned acts.

Secondly, with regard to illegally carrying, mailing, transporting or depositing blank invoices, tax authorities will take over the invoices, confiscate the illegal gains and impose a less than 10000 yuan fine.

Thirdly, with regard to unauthorized printing, forging, altering, illegal trading in invoices, unauthorized manufacture of invoice-supervising manufacture seal and special products for anti- forged invoices, tax authorities will seal up, detain or recriminate them, confiscate the illegal gains and tools of offense, and impose a fine ranging between 10000 and 50000 yuan; those whose case is serious and constitutes a crime shall be given criminal sanctions.

X. The Connection of Old and New Regulations In line with the stipulations of the Methods, the Original Methods promulgated by the Ministry of Finance in 1986 and the Original Regulations promulgated by the original State Administration of Taxation in 1991 were abolished from the day of the publication of the Methods. The Original Methods and the Original Regulations are, in principle, applicable to previous illegal cases and illegal acts related to invoices which are being handled or are newly discovered after the publication of Methods. However, for convenience in operation, stipulations relating to such procedural aspects as handling and reconsidering cases, the Methods and Detailed Rules are, without exception, applicable.

In short, the Methods are a basic regulation concerning China's invoice management and an important legal weapon for safeguarding the order of the socialist market economy and taxation. Tax authorities at all levels should conscientiously organize tax collectors to study and use the Method well; at the same time, it is necessary to conduct extensive publicity on the Methods to society, so as to win the understanding and support of various quarters and to enable the Methods to play theirs due role in the establishment and improvement of the socialist market economic structure with Chinese characteristics. The adoption of the derating method can, in line with the method for calculating the dutiable tax value of the tax-free product, work out all tax value of the product and then calculate the reduced tax value in accordance with the stipulated tax rebatement proportion.