Circular of the Ministry of Finance and the State Administration of Taxation on Further Implementing Tax Exemption, Offset and Refund on Exported Commodities

Circular of the Ministry of Finance and the State Administration of Taxation on Further Implementing Tax Exemption, Offset and Refund on Exported Commodities

Cai Shui [2002] No.7

January 23, 2002

Upon the decision of the State Council, measures of administration on tax exemption, offset and refund shall be further implemented and the relevant matters are hereby notified as follows:

Article 1 With regard to manufacturing enterprises exporting self-made commodities by themselves or through the agency of foreign trade enterprises (hereinafter referred to as the export of manufacturing enterprises), measures of administration on tax exemption, offset and refund shall be implemented on value-added tax (VAT) unless otherwise provided for. The measures of administration on tax exemption, offset and refund on non-self-made commodities export of manufacturing enterprises shall be formulated separately.
A manufacturing enterprise as mentioned in this Circular refers to the enterprise or enterprise group, which carries out independent accounting, is recognized as a general taxpayer by the national tax authorities and has actual manufacturing ability.
With regard to small-scale taxpayers exporting self-made commodities, the VAT shall continue to be exempted.
With regard to self-made commodities exported by manufacturing enterprises, the consumption tax which is to be imposed on them shall be exempted.

Article 2 In the measures of tax exemption, offset and refund, tax exemption refers to exemption from VAT at the stage of manufacturing and marketing for the self-made commodities exported by manufacturing enterprises; tax offset refers to offset to tax payable of commodities sold in domestic market with refundable input tax of the raw materials, components, fuels and power of self-made commodities exported by manufacturing enterprises; tax refund refers to refund of the tax which is not offset when the tax to be offset of self-made commodities exported by manufacturing enterprises in the current month is more than the tax payable.

Article 3 The Relevant Method of Calculation
1.Calculation of the tax payable for the period
Tax payable for the current period=Output tax payable of commodities sold in domestic market for the period-(Input tax for the period- Tax exempted, offset and refunded for the period which may not be exempted or offset)
2.Calculation of the tax exempted, offset and refunded
Tax exempted, offset and refunded=FOB Price of exported commodities×RMB forex quotations×Export Rebate Rate-Offset amount for the tax exempted, offset and refunded)
(1) The FOB Price of exported commodities is subject to the FOB price calculated in the export invoices.
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