Draft of consumption tax law issued by the Ministry of Finance: Taxation of liquor production and import

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 Draft of consumption tax law issued by the Ministry of Finance: Taxation of liquor production and import


[1] in accordance with the current policies, the ten deduction policies for purchased taxable consumer goods are clarified, involving cigarettes, firecrackers and fireworks, golf balls and ball sets, wooden disposable chopsticks, solid wood floors, oil products, beer, wine, high-grade cosmetics, etc., and the management of deduction vouchers is also stipulated.

[2] according to the table of tax items and rates in the consumption tax law of the peoples Republic of China (Draft for comments), liquor is taxed in the production (import) process, with the tax rate of 20% plus 0.5 yuan / 500g (or 500ml)

[3] gold and silver jewelry, platinum jewelry, diamond and diamond jewelry are taxed at 5% in retail;

[4] passenger cars are charged at a tax rate ranging from 1% to 40% based on cylinder capacity.

The Ministry of Finance issued the consumption tax law of the peoples Republic of China (Draft for comments) to solicit opinions from the public.

Full text: consumption tax law of the peoples Republic of China (Draft for comments)

Article 1 units and individuals that sell, commission processing and import taxable consumer goods within the territory of the peoples Republic of China shall be taxpayers of consumption tax and shall pay consumption tax in accordance with the provisions of this law.

Article 2 the items, tax rates and collection links of consumption tax shall be implemented in accordance with the table of items and tax rates of consumption tax attached to this law.

According to the needs of macro-control, the State Council may adjust the tax rate of consumption tax and report it to the Standing Committee of the National Peoples Congress for the record.

Article 3 taxpayers selling taxable consumer goods in the production, wholesale or retail links shall pay consumption tax in accordance with the provisions of this law.

Taxpayers who do not sell taxable consumer goods for their own use shall pay consumption tax in accordance with the provisions of this law.

Article 4 consumption tax shall be calculated according to the methods of ad valorem and ad valorem, or the compound calculation of ad valorem and ad valorem (hereinafter referred to as the compound calculation). Calculation formula of tax payable:

Tax payable calculated by ad valorem method = sales amount u00d7 proportional tax rate

The amount of tax payable calculated according to the volume method = sales volume u00d7 fixed tax rate

The amount of tax payable calculated by the composite tax method = sales amount u00d7 proportional tax rate + sales quantity u00d7 fixed tax rate

Article 5 Where taxpayers concurrently operate taxable consumer goods with different tax rates, the sales volume and sales volume of taxable consumer goods with different tax rates shall be accounted for separately; where the sales volume and sales volume are not accounted for separately, or taxable consumer goods with different tax rates are sold as a complete set of consumer goods, the high applicable tax rate shall apply.

Article 6 The term sales volume refers to the consideration related to the taxable consumer goods obtained by a taxpayer, including all monetary or non monetary economic benefits.

The sales of taxable consumer goods sold by taxpayers shall be calculated in RMB. If a taxpayer settles sales in a currency other than RMB, it shall be converted into RMB.

Article 7 for taxpayers own use of taxable consumer goods that are not sold abroad, tax shall be calculated and paid according to the sales price of the same kind of consumer goods sold by taxpayers; if there is no sales price of the same kind of consumer goods, tax shall be calculated and paid according to the component tax price.

The formula for calculating the composite tax price by applying the ad valorem method: composite tax price = (cost + profit) u00f7 (1-proportional tax rate)

The formula for calculating the composite tax price: composite tax price = (cost + profit + self used quantity u00d7 fixed tax rate) u00f7 (1-proportional tax rate)

Article 8 for taxable consumer goods commissioned for processing, tax shall be calculated and paid in accordance with the selling price of the same kind of consumer goods of the entrusted party; if there is no selling price of the same kind of consumer goods, tax shall be calculated and paid in accordance with the composite taxable price.

The formula for calculating the composite tax price by applying the ad valorem method: composite tax price = (material cost + processing fee) u00f7 (l-proportional tax rate)

The formula for calculating the composite tax price: composite tax price = (material cost + processing fee + entrusted processing quantity u00d7 fixed tax rate) u00f7 (1-proportional tax rate)

Article 9 the tax of the imported taxable consumer goods shall be calculated and paid in accordance with the component taxable price.

The formula for calculating the composite tax price by applying the ad valorem method: composite tax price = (tariff tax price + tariff) u00f7 (1-consumption tax proportional tax rate)

Formula for calculating the composite tax price: composite tax price = (tariff price + tariff + import quantity u00d7 consumption tax quota rate) u00f7 (1-consumption tax proportional rate)

Article 10 if the taxable price and quantity of taxable consumer goods declared by a taxpayer are obviously low and have no reasonable commercial purpose, the tax authorities and customs shall have the right to verify the taxable price and quantity.

Article 11 for the taxable consumer goods recovered from the entrusted processing and used by the entrusting party for the continuous production of taxable consumer goods, the consumption tax paid shall be allowed to be deducted according to the provisions.

Article 12 If the purchased taxable consumer goods are used for the continuous production of taxable consumer goods, the consumption tax paid in accordance with the following circumstances shall be allowed to be deducted according to the provisions:

(1) producing cigarettes from cut tobacco;

(2) producing firecrackers or fireworks;

(3) producing golf clubs with club heads, bodies and grips;

(4) producing wooden disposable chopsticks with wooden disposable chopsticks;

(5) producing solid wood floor;

(6) producing refined oil from naphtha or fuel oil;

(7) producing gasoline, diesel oil and lubricating oil respectively;

(8) producing beer with beer liquor among enterprises within the group;

(9) where wine is produced;

(10) producing high-grade cosmetics.

Except for items (6), (7) and (8), the above deductible circumstances are limited to the taxable consumer goods imported or purchased from taxpayers of the same tax items.

Article 13 A taxpayer shall deduct consumption tax on the strength of legal and effective vouchers.

Article 14 taxpayers exporting taxable consumer goods shall be exempted from consumption tax, except as otherwise provided by the State Council.

According to the needs of national economic and social development, the State Council may prescribe the exemption or reduction of consumption tax, which shall be reported to the Standing Committee of the National Peoples Congress for the record.

Article 15 the consumption tax shall be collected by the tax authorities, and the consumption tax on the imported taxable consumer goods shall be collected by the Customs on behalf of the tax authorities.

The customs shall share with the tax authorities the information on the entrusted consumption tax collection and the information on the export declaration of goods.

Measures for the calculation and collection of consumption tax on taxable consumer goods brought or mailed into China by individuals shall be formulated by the State Council.

Article 16 the time when the consumption tax liability occurs shall be determined according to the following provisions:

(1) when a taxpayer sells taxable consumer goods, the tax liability shall occur on the day when the sales amount is received or the sales amount is obtained; when the invoice is issued first, it shall be the day when the invoice is issued.

(2) in the case of entrusted processing of taxable consumer goods, except that the entrusted party is an individual, the entrusted party shall collect and pay taxes at the time of delivery to the entrusting party, and the time of tax liability shall be the day when the entrusted party delivers the goods to the entrusting party.

(3) where the taxable consumer goods for personal use are not sold to the outside world, the tax liability shall occur on the day when the goods are transferred.

(4) for the import of taxable consumer goods, the tax liability shall occur on the day when they enter the customs territory.

Article 17 the place of payment of consumption tax shall be determined according to the following provisions:

(1) where a taxpayer sells taxable consumer goods or uses taxable consumer goods for his own use, he shall, unless otherwise stipulated by the competent department of Finance and taxation under the State Council, report and pay tax to the competent tax authority in the place where the taxpayer institution is located or where he resides.

(2) in the case of entrusted processing of taxable consumer goods, the entrusted party shall, in addition to being an individual, remit the consumption tax to the competent tax authority in the place where the institution is located.

(3) for the import of taxable consumer goods, it shall declare and pay taxes to the Customs at the place of declaration.

Article 18 the tax period of consumption tax shall be ten days, fifteen days, one month, one quarter or six months respectively. The specific tax period of a taxpayer shall be determined respectively by the competent tax authorities according to the amount of tax payable by the taxpayer; if the tax cannot be paid in accordance with the fixed tax period, the tax may be paid in installments.

If a taxpayer takes a month, a quarter or a half year as a tax period, it shall declare and pay tax within 15 days from the expiration of the tax period; if it takes 10 or 15 days as a tax period, it shall prepay the tax within 5 days from the expiration of the tax period, declare and pay tax within 15 days from the first day of the next month and settle the tax payable of the previous month.

The period of tax calculation and the period of tax declaration and payment of the tax paid by the withholding agent shall be governed by the provisions of the preceding two paragraphs.

Taxpayers importing taxable consumer goods shall pay taxes within 15 days from the date when the customs fills in and issues the special payment certificate for import consumption tax.

Article 19 the administration of the collection of consumption tax shall be carried out in accordance with the provisions of this Law and the law of the peoples Republic of China on the administration of tax collection.

Article 20 the State Council may carry out a pilot reform of consumption tax, adjust the items, tax rates and collection links of consumption tax, and submit the pilot scheme to the Standing Committee of the National Peoples Congress for the record.

Article 21 the tax authorities and the development and reform, industry and information, public security, ecological environment, transportation, commerce, emergency management, customs, market supervision and other relevant departments shall establish a consumption tax information sharing and cooperation mechanism, and strengthen the collection and management of consumption tax.

Article 22 The State Council shall, in accordance with this law, formulate implementing regulations.

Article 23 this Law shall go into effect as of. The Provisional Regulations of the peoples Republic of China on consumption tax promulgated by the State Council on December 13, 1993 shall be repealed at the same time.

Attachment: table of consumption tax items and rates

Source: responsible editor of the Ministry of finance of the peoples Republic of China: Zhou Xinyi