Scope of Charge

• The sales of goods
• The provision of processing, repairs and replacement
• The importation of goods

Basis of Assessment

Tax Rate

• General taxpayers: standard VAT rate17%, low VAT rate 13%
• Small-scale taxpayers: VAT rate for commercial enterprises 4%; VAT rate for productive enterprises 6%

Computation of Tax Payable

• Tax Payable by General Taxpayers=Tax Payable on Sales in Current Period － Tax Payable on Purchase in Current Period, where
• Tax Payable on Sales means the VAT computed received from the purchasers by the taxpayers selling goods or providing taxable services according to stipulated VAT rate
• Tax Payable on Purchase means the VAT paid by the taxpayers purchasing goods or accepting taxable services, which in comparison with the foregoing Tax Payable on Sales received by the sellers, is paid by the purchasers.
• Tax Payable by Small-scale Taxpayers = Tax-including Sales Amount ÷ (1＋Tax Rate）× Tax Rate
• Tax Payable by Taxpayers Exporting Goods = (Dutiable Value ＋Tariff＋Excise Tax) × Tax Rate

Intermediate Links of Taxation

• Sales link ·Processing linkb ·Import link

Exportation Policies

• Productive enterprises and foreign-trade enterprises empowered to manage exportation are entitled to free export and refund on their value added taxes
• Small-scale taxpayers are entitled to free export but no refunds
• Taxpayers exporting goods restricted by the Country are not entitled to free exports or refunds

Tax Preferences

• That portion of VAT exceeding 3% of actual tax burdens of the general VAT payers who sell self-produced integrated circuits (IC) and software products will be refunded promptly upon imposition
• Value added taxes on agricultural products, cereals and oils, coal gas, chemical fertilisers and others are chargeable at the VAT rate of 13%