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	NOTICE OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON TRIAL IMPLEMENTATION OF TAX REFUND (EXEMPTION) FOR EXPORT GOODS UNDER SMALL-SCALE BORDER TRADE SETTLED IN RENMINBI

	(No.245 [2003] of the Ministry of Finance, State Administration of Taxation promulgated on January 13, 2004 and have come into force as of January 1, 2004)


SUBJECT : EXPORT TAX REFUND; SMALL-SCALE BORDER TRADE SETTLED IN RENMINBI
ISSUING DEPARTMENT : THE MINISTRY OF FINANCE OF THE PEOPLE'S REPUBLIC OF CHINA, STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 01/13/2004
IMPLEMENT DATE : 01/01/2004
LENGTH : 1,100 words
TEXT :

In order to promote the healthy development of small-scale border trade, tax refund (exemption) will be implemented on a trial basis with respect to the export goods under small-scale border trade settled in Renminbi. The relevant matters are hereby notified as follows:

1. The term "small-scale border trade" used herein refers to the trade activities carried out by the enterprises with the management power of small-scale border trade, which are located in the border counties (prefectures) and border cities along the land border that are open to foreign trade upon approval of the state, with the enterprises or other trade agencies of the border areas of adjacent countries through the land border ports designated by the state.

2. An enterprise of small-scale border trade shall, by taking its document of approval for the management power of small-scale border trade, the industry and commerce business license, and the tax registration certificate, apply for the export tax refund registration certificate with the tax authority in charge of tax refund of the place where it is located within 30 days from the day of approval, or within 30 days from the day of distribution of this Notice. An enterprise of small-scale border trade without the export refund certificate may not apply for tax refund.

3. Where an enterprise of small-scale border trade exports goods by settlement in Renminbi, except there are otherwise provisions, it may, after finishing customs clearance of the goods and selling the goods financially, apply for refund or exemption of the value-added tax and consumption tax with the tax authority on a monthly basis.

4. An enterprise of small-scale border trade shall provide the following certificates when applying for tax refund (exemption) for export goods settled in Renminbi:

(1) value-added tax special invoice of the export goods purchased (deducting slip), which has been certified by the tax authority ;

(2) certificate of payment of value-added tax (for export goods) or export goods tax-paid slip.

If the export goods are taxable consumer goods, the enterprise of small-scale border trade shall also provide the special certificate of consumption tax payment;

(3) customs declaration form for export goods issued by the customs (for export tax refund);

(4) verification form of foreign exchange collection in export (for export tax refund) issued by the authority of foreign exchange administration.

The verification form of foreign exchange collection in export (for export tax refund) must indicate the words of "settled in Renminbi", and the concrete method of settlement shall be specified as bank transfer or cash settlement; and

(5) Other certificates the export tax refund authority requires to be supplied.

If the enterprise of small-scale border trade can not provide the abovementioned certificates for its export goods, the tax authority shall not handle tax refund.

5. After an enterprise of small-scale border trade exports goods by settlement in Renminbi, the amount of tax refund shall be calculated in accordance with the following formulas:

(1) CALCULATION FORMULA FOR THE EXPORT GOODS SETTLED BY BANK TRANSFER:

Amount Of Refundable Value-added Tax = Purchase Price Specified On The Special Invoice Of Value-added Tax Of Export Goods Purchased x Prescribed Rate For Value-added Tax Refund x 70%

Amount Of Refundable Consumption Tax = Purchase Price Specified On The Special Invoice Of Value-added Tax Of Export Goods Purchased (Amount Exported) x Consumption Tax Rate (Unit Amount) x 70%

(2) CALCULATION FORMULA FOR THE EXPORT GOODS SETTLED IN CASH:

Amount Of Refundable Value-added Tax = Purchase Price Specified On The Special Invoice Of Value-added Tax Of Export Goods Purchased x Prescribed Rate For Value-added Tax Refund x 40%

Amount Of Refundable Consumption Tax = Purchase Price Specified On The Special Invoice Of Value-added Tax Of Export Goods Purchased (Amount Exported) x Consumption Tax Rate (Unit Amount) x 40%

6. If, after the tax has been refunded (exempted) for the export goods of an enterprise of small-scale border trade, the goods fail to get through customs clearance, or are returned by foreign buyers, the enterprise of small-scale border trade shall report to the tax authority in charge of export tax refund of the place where it is located and pay up the taxes that have been refunded (exempted), the tax authority shall issue the Certificate of Tax-paid for Returned Export Goods for the enterprise, and the enterprise of small-scale border trade shall, on the strength of the abovementioned certificate, apply to the customs for handling of return of goods.

7. After the end of a calendar year, an enterprise of small-scale border trade shall make a full settlement of the tax refund (exemption) of export goods of the last year, and prepare and submit a tax refund settlement report to the tax authority in charge of export tax refund. The tax authority in charge of export tax refund shall examine the tax refund report of the enterprise of small-scale border trade, any excess payment shall be refunded and any deficiency shall be repaid. After the settlement, the tax authority in charge of export tax refund will no longer accept the application for tax refund (exemption) filed by an enterprise of small-scale border trade for the last year.

8. If any enterprise of small-scale border trade cheats for export tax refund (exemption) by forging, altering or other illegal means, the tax authority shall recover the refunded (exempted) taxes pursuant to the relevant provisions of the Law of the People's Republic of China on Tax Collection Administration and punish that enterprise. With respect to an enterprise with serious circumstances of cheating, the provincial bureau of state taxation may approve suspension of its right of export tax refund (exemption) for half a year or more. Tax refund (exemption) must not be granted for the goods exported or exported by an enterprise as an agent of which the right to tax refund (exemption) has been suspended.

Where an enterprise has cheated for a relatively large amount of tax refund (exemption) or the circumstances are especially serious, the authority of foreign trade and economic cooperation shall revoke its management power of small-scale border trade, and if a crime is constituted by cheating for export tax refund (exemption), the tax authority must refer the case to the judicial organ for handling.

9. Any other matters not covered by this Notice shall be executed in accordance with the existing provisions on the administration of tax refund (exemption) of export goods.

10. This Notice shall be put into trial implementation in Yunnan province as of January 1, 2004. The specific date of trail implementation shall be the time of export stated on the customs declaration form for export goods by the customs.