Regulations of the People's Republic of China on Domestic Product Taxation (Draft)

Article 1. Units and individuals engaged in the production and import of taxable products specified in these Regulations within the territory of the People’s Republic of China and the People’s Republic of China are taxpayers of product tax (hereinafter referred to as taxpayers) and shall Product taxes shall be paid in accordance with the provisions of these regulations. Article 2 The tax items and tax rates of product taxes shall be implemented in accordance with the "Product Tax Items and Tax Rates Table" attached to these Regulations.

Adjustments to individual tax items and tax rates shall be determined by the Ministry of Finance authorized by the State Council. Article 3 Taxpayers engaged in the production of industrial products shall calculate and pay taxes based on the amount of product sales income and the prescribed tax rate or the quantity of products and the prescribed tax amount.

Industrial enterprises do not pay taxes on products produced by themselves and used in their continuous production. However, if there are special provisions in the tax item and tax rate table, tax payment shall be calculated in accordance with the provisions of the preceding paragraph.

If the taxable products produced by an industrial enterprise are used in non-production projects of the enterprise, unless otherwise specified, they shall be deemed to be sold and taxed according to the rate. Article 4 If a unit or individual that produces taxable agricultural, forestry, animal husbandry, or aquatic products sells the products to a state-owned or collective purchasing unit, the purchasing unit shall calculate taxes based on the amount paid for the purchase and the prescribed tax rate; the products are sold to other For entities and individuals, the seller shall calculate tax based on the amount of product sales income and the prescribed tax rate. Article 5 Taxpayers who import products shall, after the products are declared for import, calculate and pay taxes based on their quantity, the prescribed taxable price and the prescribed tax rate.

The taxable price = (CIF price + tariff) ÷ (1 - product tax rate)

The product tax on imported products is levied by the customs. Article 6 Products entrusted for processing, if the entrusting party is an industrial enterprise, shall be regarded as products produced by the enterprise itself and shall be handled in accordance with the provisions of Article 3 of these Regulations. If the entrusting party is not an industrial enterprise, the entrusting party shall pay taxes. Article 7 Tax reductions and exemptions:

1. Taxable products that are encouraged to be exported by the state and are directly exported by production units are exempt from tax; if product taxes have been paid, the exporter shall apply after customs declaration for export. Refund of tax paid.

2. Gold ore, gold, and contraceptive products are tax-free.

3. New products included in the national plan for trial production will be granted regular tax reductions and exemptions.

4. Products produced using waste residue, waste liquid, and waste gas will be given regular tax reductions and exemptions.

5. If it is difficult to pay taxes in accordance with regulations for special needs commodities produced in minority areas, regular tax reductions and exemptions will be provided.

6. If other products need tax reduction or exemption within a certain period due to special circumstances, they shall be handled in accordance with the tax management limits stipulated by the state. Article 8 Taxpayers shall apply for tax registration with the local tax authorities within thirty days from the date of business commencement. Article 9 Taxpayers that have been approved by the relevant departments to merge, transfer, relocate or cease operations shall, within thirty days from the date of approval, go through the procedures for change or cancellation of registration with the local tax authorities and pay the tax payable. Article 10 The time limit for paying product taxes shall be determined by the local tax authorities based on the amount of tax payable by the taxpayer, and shall not exceed one month at most. Article 11 Taxpayers shall submit tax returns to the local tax authorities in accordance with the approved tax payment deadlines. Article 12 If a taxpayer has a tax obligation and fails to declare taxes in accordance with regulations, the local tax authorities have the right to determine the amount of tax payable. Article 13: Tax authorities have the right to inspect taxpayers’ financial, accounting and tax payment situations. Taxpayers must truthfully report and provide relevant information and may not refuse or conceal it. Article 14 Taxpayers must pay taxes within the time limit approved by the tax authorities. If the tax is not paid overdue, in addition to the time limit for recovery, a late payment fee of 5‰ of the overdue tax will be charged on a daily basis from the date of overdue payment.

When the tax authorities’ calls for tax payment from taxpayers are invalid, they can notify the bank where the taxpayer has an account to withhold the tax and deposit it into the treasury.

Article 15 If a taxpayer violates the provisions of Articles 8, 9, 11 and 13 of these Regulations, the tax authorities may impose a fine of not more than 5,000 yuan as appropriate; , in addition to recovering the tax payable, a fine of not more than five times the tax payable may be imposed as appropriate. If the circumstances of tax evasion or tax resistance are serious and violate criminal laws, the tax authorities shall submit the matter to the judicial authorities for investigation of criminal liability in accordance with the law. Article 16 If a taxpayer fails to pay taxes in accordance with the provisions of these regulations, anyone can report it. After the tax authorities verify and handle the matter, the whistleblower may be rewarded in accordance with regulations and kept confidential. Article 17 When a taxpayer has a dispute with a tax authority over a tax payment issue, the taxpayer must first pay tax in accordance with the decision of the tax authority, and then apply for reconsideration to the higher tax authority. The superior tax authority shall respond within thirty days from the date of receipt of the application. If a taxpayer is dissatisfied with the reconsideration of the superior tax authority, he may file a lawsuit in the People's Court. Article 18 The implementation details of these Regulations shall be formulated by the Ministry of Finance. Article 19: These Regulations shall come into force on a trial basis from October 1, 1984.

Attachment: Product tax item and rate table

Industrial products section

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┌───── ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Category ┃ Tax items ┃ Taxation scope ┃ Tax rate ┃ Description┃

├──────┻─────────┻─────────┻───┻──────┤

┃1. Tobacco┃1. Cigarettes: Class A cigarettes┃　　　　┃ 60 ┃　　　┃

┃　　　┃　　　┃　　┃　　　┃ 60 ┃　　┃

┃　　　┃　　Grade C cigarettes Smoke┃　　　　　┃ 56 ┃　　　┃

│　　　│　　　Class D cigarettes│　　　　│ 50 │　　　│

┃　　　┃　　　　┃　32 ┃　　　┃

┃　　　　┃2． Cigars　　┃　　　　┃ 47 ┃　　　┃

┃　　　┃3. Cut tobacco Including: pipe tobacco, 35 ┃　　┃

┃　　　┃　　　　　┃Mohe tobacco.　　　┃　　┃　　　┃

┃2. Alcoholic beverages　┃4. Liquor: Grain wine┃　　　　┃ 50┃　The enterprise makes homemade┃

┃　　　┃　　Potato wine┃　　　　┃ 40 ┃White wine and rice wine┃

┃　　　┃　　　　　　┃ 28 ┃Use In connection with this enterprise, other raw material wines include: substitute wine. ┃ 15 ┃ If production continues, ┃