Comparative Statement of Turnover Tax :
| Taxable Item | Value-added tax | Consumption Tax | Business Tax |
| Incidence of Taxation |
1. goods 2. taxable services 3. imported goods |
There are eleven items such as 1. alcoholic drinks and alcohol 2. cosmetics 3. skin-care and hair-care products 4. precious jewelry and precious stone ornaments 5. firecrackers and fire-works 6. gasoline and diesel oil 7. motor vehicle tires, motorcycles and motor cars and so on |
1. communications and transportationtransportation by land, water, air and pipeline, loading, unloading and delivery 2. construction (construction, installation, repair, decoration and other engineering work) 3. finance and insurance 4. posts and telecommunications 5. culture and sports 6. entertainment (singing bars, dance halls, karaoke lounges, commercial music halls, musical tea houses, billiards, golf, bowling and amusement facilities) 7. servicing (agency, hotel, catering, tourism, warehousing,leasing, advertising and other services) 8. transfer of intangible assets (Transfer of land-use rights,patent rights, unpatented technologies, trade marks,copyrights and goodwill) 9. sale of immovable(properties Sale of buildings and other attachments to land) |
| Tax Base | The tax base for the value-added tax is the sales amount, which shall be the total consideration and all other charges receivable from the purchasers by the taxpayer selling goods or taxable services (but excluding the output tax collectible). |
The computation of tax payable for consumption tax shall follow either the rate on value or the amount on volume method. The tax base for the tax payable computed under the rate on value method shall be the total consideration and other charges receivable from the buyer for the taxable consumer goods sold by the taxpayer. |
The tax base for the tax payable computed under the amount on volume method shall be total consideration and all other charges receivable from the purchasers by the taxpayer selling taxable consumer goods (but excluding the value-added tax collectible upon the purchasers). The tax base for the consumption tax is the turnover of the taxpayers, which shall be the total consideration and all other changes receivable from the payers for the provision of taxable services transfer of intangible assets or sales of immovable properties by the taxpayers. |
| Tax Rate | The basic and low rates leviable on general taxpayers shall be 17% and 13 separately. Rates leviable on small-scale taxpayers respectively running business enterprises and productive enterprises shall be 4% and 6%. |
The proportional tax rate and norm quota tax rate are used for the calculation of consumption tax, so as to determine corresponding tax rate or tax amount per unit based on different tax items or specific items. The proportional tax rate ranges from 5% to 45% , while the norm quota tax rate varies from RMB 0.1 to RMB 250 . |
Different proportional tax rates of business tax are applicable to various industries as follows: 1. The proportional tax rate for industries in terms of communications and transportation, construction, posts and telecommunications and culture and sports. 2. The proportional tax rate for servicing, sale of immovable and transfer of intangible assets is 5%. 3. The proportional tax rate for entertainment ranges from 5% to 20%. |
|
Calculation of Tax Payable |
1. Tax payable by general taxpayers =Output tax payable for the period-Input tax for the period . 2. Tax payable by small-scale taxpayers = Sales amount containing tax 1leviable rate leviable rate 3. Tax Payable on Imported goods= (customs dutiable value + customs duty + consumption tax) tax rate |
1. The tax payable computed under the rate on value method = Sales amount of taxable consumer goods applicable tax rate 2. The tax payable computed under the amount on volume method = Sales volume of taxable consumer goods applicable tax amount 3. tax payable on imported consumer goods=customs dutiable value + customs duty /1- consumption tax rateconsumption tax rate |
tax payable=business tax tax rate |
|
Stages of Tax Payment |
1. sales stage 2. processing stage 3. import stage |
1. production stage 2. processing stage 3. retail stageindustry of gold and silver ornament |
|
|
Export Policies |
1. General taxpayers of value-added tax shall enjoy policies on tax exemption and refund for export. 2. Small-scale taxpayers of value-added tax shall enjoy policies on free export but not on tax refund for export. 3. Neither tax exemption nor refund for export shall be granted to goods restricted or prohibited to be exported by the State |
1. Foreign trade enterprises authorized with the right to import or export may be entitled to tax exemption and refund for export. 2. Productive enterprises authorized with the right to import or export, if engaged in export independently or entrusting foreign trade enterprises to do so, may enjoy tax exemption instead of tax refund. 3. Other taxable consumer goods exported by commerce and trade enterprise may neither be exempted from tax nor be entitled to tax refund. |
|
|
Tax Preferential Treatment |
1. For integrated circuit and software products which are independently produced by general taxpayers of value-added tax , the part over 3%, which are actually paid, will be refunded immediately after paid. 2. The tax rate leviable upon cereals and oil, gas, fertilizer, and metals mining products is 13%. |
Enterprises producing low emission motor cars shall be exempted from consumption tax or be levied a consumption tax at a reduced rate of 30%. | The consumption tax shall not be imposed upon services offered by welfare organizations such as a nursery, medical services from medical institutions, education services provided by schools, agricultural technical training services and services of other kinds. |
