The tax-exempt items are:
(I) Agricultural products
1. Sales of self-produced agricultural products
Sales of self-produced agricultural products by agricultural producers are exempted from VAT.
(From the Provisional Regulations on Value-Added Tax of the People's Republic of China*** and the State)
2. Grain and Edible Vegetable Oils
Sales of grain by state-owned grain purchasing and marketing enterprises that are tasked with grain storage are exempted from value-added tax (VAT); VAT is levied on the operation of grain by other grain enterprises, with the exception of the following items which are exempted from VAT.
(1) Grain for military use: grain supplied to the People's Liberation Army (PLA) and the People's Armed Police Force of China (PAPF) on the basis of military food stamps and military grain supply certificates at military supply prices.
(2) Disaster Relief Grain: Grain approved by the people's government of the county (including) or above, and supplied at the stipulated selling price to disaster victims in need of assistance on the basis of the Disaster Relief Grain (Certificate).
(3) Reservoir immigrant rations: food approved by the people's government of the county (including) or above, and supplied to reservoir immigrants at the stipulated selling price on the basis of reservoir immigrant ration tickets (certificates).
Value-added tax (VAT) is levied on the sale of edible vegetable oils in accordance with the regulations, except for the sale of edible vegetable oils from government reserves which continues to be exempted from VAT.
This Circular is effective from August 1, 1998 onwards.
(From Cai Shui [1999] No.198)
Grain subsidized for returning farmland to forests and grasslands operated by the grain sector is exempted from value-added tax if it conforms to the standards stipulated by the state.
(From State Taxation [2001] No. 131)
(2) Agricultural production materials
1. Feed
The scope of tax-free feed products includes:
(1) Single bulk feed. Refers to products or their by-products that are sourced from a single animal, plant, microorganism or mineral. Its scope is limited to bran, lees, fishmeal, grass feed, feed-grade calcium phosphate and meal products such as rapeseed meal, cottonseed meal, sunflower meal and peanut meal, in addition to soybean meal.
(2) mixed feed. Refers to more than two kinds of single bulk feed, grain, grain by-products and feed additives in accordance with a certain proportion of configuration, in which a single bulk feed, grain and grain by-products, the proportion of participation of not less than 95% of the feed.
(3) with the feed. Refers to different feeding objects, feeding objects of different stages of growth and development of the nutritional needs of a variety of feed ingredients according to the feed formula by industrial production, the formation of feed to meet all the nutritional needs of feeding animals (in addition to water) of the feed.
(4) compound premix. Refers to the amount of feed products in accordance with national standards, to provide a comprehensive animal feeding the corresponding stage of micronutrients (4 or more), vitamins (8 or more), micronutrients, vitamins, amino acids and non-nutritive additives in any two or more categories of components and carriers or diluents in a certain proportion of the configuration of the homogeneous mixture.
(5) Concentrated feed. Means a homogeneous mixture of proteins, compound premixes and minerals, etc., configured in certain proportions.
This notice from August 1, 2001 onwards.
(From Cai Shui [2001] No.121)
Feeding fish oil is a by-product in the production process of fishmeal, which is mainly used in aquaculture and broiler feeding, and belongs to a single bulk feed. Since January 1, 2003, feed fish oil products have been exempted from value-added tax in accordance with the current value-added tax policy of "single bulk feed".
(Extracted from Guo Shui Han [2003] No.1395)
Mineral Trace Element Licking Brick, which is a lumpy premix made of more than four kinds of trace elements, non-nutritive additives and carriers as raw materials and concentrated under high pressure, can be consumed directly by livestock such as cows and goats, and shall be exempted from value-added tax in accordance with the policy of "feed".
(Extracted from Guo Shui Han [2005] No.1127)
Feed-grade dicalcium phosphate products can be exempted from value-added tax in accordance with the current value-added tax policy of "single bulk feed".
This Circular is effective from January 1, 2007 onwards.
(Extracted from Guo Shui Han [2007] No.10)
2. Other Agricultural Production Materials
The following goods are exempted from VAT:
(1) Agricultural films.
(2) Production and sale of nitrogen fertilizers other than urea, phosphate fertilizers other than diammonium phosphate, potash fertilizers, and compound fertilizers with duty-free fertilizers as the main raw material (the cost of duty-free fertilizers used by enterprises for the production of compound fertilizers is higher than 70% of the cost of all the fertilizers used as raw materials). The term "compound fertilizer" refers to fertilizers made by chemical or physical processing of at least two of the three nutrients of nitrogen, phosphorus and potassium in marked amounts, including compound fertilizers made by chemical methods only and mixed fertilizers made by physical methods only (also known as blended fertilizers).
(3) Seeds, seedlings, fertilizers, pesticides and agricultural machinery for wholesale and retail sale.
(From Cai Shui [2001] No. 113)
Non-powered walking tractor (also known as "walking tractor chassis") and three-wheeled agricultural transportation vehicle (refers to the three-wheeled agricultural transportation vehicle with a single-cylinder diesel engine as the power unit) belongs to the "Agricultural Machinery
These products are classified as "agricultural machinery" and shall be exempted from value-added tax in accordance with the provisions of the value-added tax policy on "agricultural machinery".
This Circular is effective from June 1, 2002 onwards.
(From Cai Shui [2002] No. 89)
Since July 1, 2007, taxpayers are exempted from value-added tax (VAT) on the production and sale, as well as on the wholesale and retail of drip irrigation tapes and drip irrigation pipe products. Drip irrigation tape and drip irrigation pipe products refers to agricultural water-saving drip irrigation system special, with the manufacturing process of processing the orifice or other outflow device, able to drip or continuous flow of water out of the water belt and water pipe products. Drip irrigation tape and drip irrigation pipe products in accordance with the requirements of the relevant national quality and technical standards for production, and with PVC pipe (main), PE pipe (auxiliary pipe), socket fittings, filters and other components for drip irrigation system.
(From Cai Shui [2007] No. 83)
Since December 1, 2004, the production and sale of potash fertilizers by fertilizer manufacturers, from the exemption of value-added tax to the implementation of the first return.
(From Cai Shui [2004] No. 197)
Effective July 1, 2005, the VAT on urea products produced and sold by domestic enterprises has been adjusted from being levied first and then returned by 50% to being temporarily exempted from VAT.
(From Cai Shui [2005] No. 87)
Since January 1, 2008, the production and sales of diammonium phosphate products by taxpayers have been exempted from VAT.
(From Cai Shui [2007] No. 171)
Since June 1, 2008, taxpayers have been exempted from value-added tax on the production and sale as well as wholesale and retail of organic fertilizer products.
Organic fertilizer products enjoying the above tax exemption policy refer to organic fertilizers, organic-inorganic compound fertilizers and bio-organic fertilizers.
(1) Organic fertilizers refer to carbon-containing materials originating from plants and/or animals and applied to the soil with the main function of providing plant nutrition.
(2) organic-inorganic compound fertilizer refers to organic and inorganic fertilizers mixed and/or compound fertilizers containing a certain amount of organic fertilizers.
(3) bio-organic fertilizer refers to the specific function of microorganisms and mainly animal and plant residues (such as livestock manure, crop residues, etc.) as a source of harmless treatment, decomposition of organic materials composite of a class of both microbial fertilizers and organic fertilizers fertilizer effect.
(From Cai Shui [2008] No. 56)
Ammoniated calcium nitrate is a nitrogen fertilizer. According to the Circular of the Ministry of Finance and the State Administration of Taxation on the Policies for the Levy and Exemption of Value-added Tax on Certain Agricultural Production Materials (Cai Shui [2001] No. 113), Article 1, Paragraph 2, ammoniated calcium nitrate is exempted from value-added tax.
(Guo Shui Han [2009] No. 430)
Note: Since February 1, 2007, the VAT rate applicable to ammonium nitrate has been uniformly adjusted to 17%, and at the same time, it is no longer entitled to the policy of exempting fertilizer products from VAT.
(From Cai Shui [2007] No.7)
(C) Comprehensive Utilization of Resources
1. Reclaimed Water
Since January 1, 2009, the following self-produced goods have been exempted from the VAT policy on the sale of: reclaimed water. Reclaimed water refers to the sewage treatment plant effluent, industrial drainage (mine water), domestic sewage, garbage treatment plant infiltration (filtration) of liquid and other water sources for recycling, after appropriate treatment to achieve a certain standard of water quality and reuse of water resources within a certain range. Recycled water should be consistent with the Ministry of Water Resources, "recycled water quality standards" (SL368-2006) of the relevant provisions.
(From Cai Shui [2008]]No. 156)
2, glue powder
Since January 1, 2009, the sale of the following self-produced goods to implement the policy of exemption from value-added tax: waste tires as the raw materials for the production of all the production of glue powder. Rubber powder should comply with the performance indicators specified in GB/T19208-2008.
(From Cai Shui [2008]]No. 156)
3, retreaded tires
Since January 1, 2009, the following self-produced goods on the sale of value-added tax exemption policy: retreaded tires. Retreaded tires shall comply with the performance indicators specified in GB7037-2007, GB14646-2007 or HG/T3979-2007, and the carcasses of retreaded tires are 100% from waste tires.
(From Cai Shui [2008]]No.156)
4, specific building materials products.
Since January 1, 2009, the sales of the following self-produced goods to implement the policy of exemption from value-added tax: production of raw materials mixed with the proportion of waste residue is not less than 30% of specific building materials products. Specific building materials products, refers to bricks (excluding sintered ordinary bricks), blocks, ceramic granules, wall panels, pipes, concrete, mortar, road covers, road guardrails, fireproof materials, refractory materials, thermal insulation materials, mineral (rock) cotton.
(From Cai Shui [2008]]No. 156)
5, to sewage treatment labor.
Executed since January 1, 2009, sewage treatment labor services are exempted from value-added tax. Sewage treatment refers to the sewage processing and treatment of sewage in line with the relevant provisions of GB18918-2002 water quality standards of the business.
(From Cai Shui [2008]]No.156)
6. High-purity carbon dioxide products.
Since July 1, 2008, the sale of the following self-produced goods to implement the policy of immediate refund of value-added tax: high purity carbon dioxide products produced from industrial waste gas as raw materials. High purity carbon dioxide products, should comply with the relevant provisions of GB10621-2006.
(From Cai Shui [2008]]No.156)
7, electricity or heat.
Since July 1, 2008, the policy of immediate refund of VAT has been applied to the sale of the following self-produced goods: electricity or heat produced with garbage as fuel. The amount of garbage accounted for no less than 80% of the proportion of fuel for power generation, and the production of emissions to meet the GB13223-2003 time period 1 standard or GB18485-2001 relevant provisions. The so-called garbage refers to municipal garbage, crop residue, bark waste, sludge, medical waste.
Since July 1, 2008, the sale of the following self-produced goods to realize the value-added tax to implement the policy of immediate refund of 50%: the gangue, coal slurry, stone coal, oil shale as fuel for the production of electricity and heat. Coal gangue, coal sludge, stone coal, oil shale use of fuel for power generation of not less than 60%.
Since July 1, 2008, the sale of the following self-produced goods realized value-added tax on the implementation of the policy of immediate refund of 50%: the use of wind power production of electricity.
(From Cai Shui [2008]]No.156)
8. Shale oil.
Since July 1, 2008, the sale of the following self-produced goods to implement the policy of immediate refund of value-added tax: shale oil produced from the coal mining process accompanied by the discards of oleo-mother shale as raw materials.
(From Cai Shui [2008]]No. 156)
9, recycled asphalt concrete.
Since July 1, 2008, on the sale of the following self-produced goods to implement the policy of immediate refund of value-added tax: waste asphalt concrete as raw materials for the production of recycled asphalt concrete. The amount of waste asphalt concrete accounted for no less than 30% of the proportion of raw materials for production.
(From Cai Shui [2008]]No. 156)
10, cement (including cement clinker).
Since July 1, 2008, the following self-produced goods on the sale of value-added tax refund policy:
The use of rotary kiln process production of cement (including cement clinker, the same below) or purchased cement clinker using the grinding process of cement production, cement production of raw materials blended with the proportion of slag is not less than 30%.
1. For the use of rotary kiln process by the raw material firing and clinker grinding stage of cement production, the proportion of slag mixing formula: slag mixing ratio = (raw material firing stage slag mixing + clinker grinding stage slag mixing) ÷ (in addition to slag other than the amount of raw materials + raw material firing and clinker grinding stage slag mixing + the amount of other materials) × 100%
2. For the purchased cement clinker produced by cement (including cement clinker, the same hereinafter), or purchased cement clinker using grinding process for cement production of raw materials in the proportion of not less than 30%. p>2. For purchased cement clinker produced by grinding process of cement, the proportion of blended slag formula: blended slag = clinker grinding stage blended slag ÷ (clinker + clinker grinding stage blended slag + the number of other materials) × 100%
(From the Cai Shui [2009]]No. 163)
11, paint nitrocellulose powder.
Since July 1, 2008, the sale of the following self-produced goods to realize the value-added tax on the implementation of the policy of immediate refund of 50%: the decommissioning of the military launchers as raw materials for the production of paint nitrocellulose powder. The proportion of retired military propellants in the production of raw materials is not less than 90%.
(From Cai Shui [2008]] No. 156)
12, by-products.
Since July 1, 2008, the sale of the following self-produced goods to achieve value-added tax on the implementation of the policy of immediate refund of 50%: Coal-fired power plants and various types of industrial enterprises to produce flue gas, high sulfur natural gas for desulfurization of the production of by-products. By-products, means gypsum (whose content of calcium sulfate dihydrate is not less than 85%), sulfuric acid (whose concentration is not less than 15%), ammonium sulfate (whose total nitrogen content is not less than 18%) and sulfur.
(From Cai Shui [2008]]No.156)
13, steam, activated carbon, white carbon black, lactic acid, calcium lactate and biogas.
Since July 1, 2008, the sale of the following self-produced goods to realize the value-added tax is the implementation of the policy of immediate refund of 50%: steam, activated carbon, carbon black, lactic acid, lactic acid, calcium lactate, biogas produced from waste wine lees and brewing pot water as raw materials. Waste wine lees and brewing pot water in the production of raw materials accounted for no less than 80%.
(From Cai Shui [2008]]No. 156)
14, some of the new wall material products.
Since July 1, 2008, the following self-produced goods sales of value-added tax realized by the implementation of the policy of immediate refund of 50%: part of the new wall materials products. The specific scope of Annex 1 to this Circular, "enjoy the preferential policies of value-added tax on new wall materials catalog".
(From Cai Shui [2008]] No. 156)
15, biodiesel.
Since July 1, 2008, the sale of self-produced comprehensive utilization of biodiesel to implement VAT first and then refund policy. Comprehensive utilization of biodiesel, refers to the diesel produced from waste animal oils and vegetable oils as raw materials. The amount of waste animal oil and vegetable oil accounted for no less than 70% of the production of raw materials.
(From Cai Shui [2008]]No. 156)
(IV) Construction Materials and Biological Products
1.
General taxpayers selling the following self-produced goods may choose to calculate and pay VAT according to the simplified method in accordance with the 6% levy rate:
Sand, soil, and stone materials used for construction and for the production of construction materials.
Bricks, tiles and lime (excluding clay solid bricks and tiles) continuously produced from sand, earth, stone or other minerals extracted by oneself.
Commercial concrete (limited to cement concrete produced from cement).
2. Biological Products
General taxpayers selling the following self-produced goods may choose to calculate and pay VAT in accordance with the simplified method at the rate of 6%:
Biological products made from microorganisms, microorganisms metabolites, animal toxins, blood or tissues of humans or animals.
(From Cai Shui [2009] No. 9)
(v) Self-used articles and used goods
1. Other individuals.
Other individuals are exempted from value-added tax on the sale of items they have used themselves.
(Extracted from the Provisional Regulations on Value-added Tax of the People's Republic of China*** and the State of China, and the Implementing Rules)
2. General taxpayers.
General taxpayers selling their own used fixed assets that fall under Article 10 of the Regulations, which are not deductible and have not been offset against input tax, shall be subject to a 50% reduction in value-added tax (VAT) under the simplified method based on a 4% levy rate.
(From Cai Shui [2009] No.9)
General taxpayers selling fixed assets purchased or manufactured before December 31, 2008, which have been used by themselves, shall be subject to a 50% reduction of value-added tax at a 4% levy rate.
(From Cai Shui [2008] No. 170)
3. Small-scale taxpayers.
Small-scale taxpayers (among other individuals) selling their own used fixed assets shall levy VAT at a reduced rate of 2%.
(From Cai Shui [2009] No. 9)
4. Used goods.
Taxpayers selling used goods shall levy VAT at a reduced rate of 4% in accordance with the simplified method. The so-called old goods refer to the goods with partial use value (including old automobiles, old motorcycles and old yachts) that have entered into secondary circulation, but do not include the items that have been used by themselves.
(From Cai Shui [2009] No. 9)
(VI) Employment of Disabled Persons and Supplies
1. Employment of Disabled Persons:
For the units that place disabled persons, the method of immediate refund of value-added tax (VAT) or reduction of business tax (BT) is implemented with a quota by the tax authorities in accordance with the number of disabled persons actually placed in the units.
The specific limit of VAT refund or business tax reduction per year for each disabled person actually placed in a unit shall be determined by the tax authorities at or above the county level on the basis of six times the minimum wage standard approved by the people's government at the provincial (including autonomous regions, municipalities directly under the central government, and municipalities separately listed in the plan, hereinafter, the same) level applicable to the district and county where the unit is located, but shall not be exceeded by more than 35,000 yuan per person per year.
Conditions for Units Enjoying Preferential Tax Policies. Units (including welfare enterprises, blind massage institutions, industrial therapy institutions and other units) that place persons with disabilities in employment, and which also meet the following conditions and have been recognized by the relevant departments, may apply to enjoy the preferential tax policies stipulated in Article 1 and Article 2 of the Circular:
(1) signing a labor contract of more than one year (including one year) with each disabled person placed in employment in accordance with law. (1) It has signed a labor contract or service agreement with each disabled person placed therein for more than one year (including one year) in accordance with the law, and each disabled person placed therein is actually working in the unit.
(2) The ratio of the average monthly number of persons with disabilities to the total number of employees shall be more than 25%, and the number of persons with disabilities actually placed in the unit shall be more than 10 (including 10). Units whose monthly average proportion of disabled persons actually accommodated to the total number of on-the-job employees in the unit is lower than 25% (excluding 25%) but higher than 1.5% (including 1.5%), and the number of disabled persons actually accommodated is more than 5 (including 5) may enjoy the preferential policies on enterprise income tax as stipulated in Article 2(1) of this Circular, but shall not enjoy the preferential policies on value-added tax or business tax as stipulated in Article 1 of this Circular.
(3) It has paid in full, on a monthly basis, for each disabled person placed therein, the social insurance such as basic pension insurance, basic medical insurance, unemployment insurance and work injury insurance as stipulated by the people's government of the district or county where the unit is located in accordance with national policies.
(4) It actually pays, through banks and other financial institutions, to each person with disabilities placed therein a wage that is not lower than the minimum wage standard approved by the provincial people's government applicable in the district or county where the unit is located.
(5) It has the basic facilities for placing persons with disabilities on the job.
Enterprises organized by special education schools are entitled to the preferential policy of immediate VAT refund with quota as long as the proportion and number of persons with disabilities actually accommodated in the special education schools on a monthly average basis are in compliance with the above provisions.
(From Cai Shui [2007] No. 92)
2. Supplies for the Disabled:
Items directly imported by disabled people's organizations for the exclusive use of disabled people are exempted from VAT.
(Extracted from the Provisional Regulations on Value-added Tax of the People's Republic of China)
Prosthetic limbs, wheelchairs and orthopedic devices (including orthopedic devices of the upper limbs, orthopedic devices of the lower limbs, orthopedic devices for scoliosis of the spine) intended for the exclusive use of persons with disabilities are exempted from the levy of value-added tax.
(Extracted from Cai Shui Zi [1994] No. 60)
3. Services Provided by Individuals with Disabilities
Processing and repair and fitting services provided by individuals with disabilities are exempted from value-added tax.
(Extracted from Cai Shui [2007] No.92)
(7) Software Products
General taxpayers of VAT who sell their self-developed and produced embedded software along with computer networks, computer hardware and machinery and equipment are exempted from VAT if they are able to sell the embedded software in accordance with the "Decision of the State Administration of Taxation of the Ministry of Finance on the Implementation of the Decision of the Central Government of China and the State Council on the Strengthening of Technological Innovation, the Development of High Technology and the Realization of Industrialization". Development of high technology, industrialization of the decision on the implementation of the Notice" (Cai Shui Zi [1999] No. 273) the provisions of Article 1, paragraph 3, separately account for embedded software and computer hardware, machinery and equipment, sales, you can enjoy the preferential policies of value-added tax on software products.
(From Cai Shui [2008] No. 92)
(viii) Farmers' Specialized Cooperatives
Farmers' specialized cooperatives are exempted from value-added tax (VAT) on the sales of agricultural products produced by their members, which are regarded as the sales of self-produced agricultural products by agricultural producers.
Farming films, seeds, seedlings, fertilizers, pesticides and agricultural machinery sold by specialized farmers' cooperatives to their members are exempted from value-added tax.
This Circular is effective from July 1, 2008 onwards.
(From Cai Shui [2008] No. 81)
(IX) Propaganda and Culture
1. Antique Books
Antique books are exempted from VAT.
(Extracted from the Provisional Regulations on Value-added Tax of the People's Republic of China)
2. Movie Prints
The administrative departments of radio, film and television (including the central, provincial, prefectural, municipal and county levels) approve, in accordance with their respective functions and authorities, the sales of movie group companies (including their member enterprises), movie studios and other movie enterprises engaged in the production, distribution and exhibition of movies, and the sales of movie prints, transfer of movie copyrights, and other movie enterprises. The income from the sale of movie prints, the income from the transfer of movie copyrights, the income from the distribution of movies and the income from the screening of movies in rural areas are exempted from value-added tax.
The implementation period of the above tax incentives is from January 1, 2009 to December 31, 2013.
(From Cai Shui [2009] No. 31)
3. Party newspapers and magazines
Cultural enterprises formed by divesting Party newspapers and magazines from their distribution and printing businesses and corresponding operating assets are exempted from value-added tax (VAT) on the distribution revenues and printing revenues of Party newspapers and magazines from the date of registration. Appropriate preferential policies shall be given to the value-added tax involved in the transfer or assignment of assets in the restructuring of operating cultural institutions, and the specific preferential policies shall be determined by the Ministry of Finance and the State Administration of Taxation in accordance with the restructuring program.
The implementation period of this Circular is from January 1, 2009 to December 31, 2013.
(From Cai Shui [2009] No. 34)
(J) Medical and Healthcare
1. Contraceptive Drugs and Appliances
Contraceptive drugs and appliances are exempted from VAT.
(From the Provisional Regulations on Value-Added Tax of the People's Republic of China*** and the State)
2. Medical and Healthcare Institutions
(1) Tax Policies Regarding Non-Profit Medical Institutions
(1) Non-profit medical institutions are exempted from the levy of all taxes on the revenues of medical services obtained in accordance with the prices stipulated by the State. Income from medical services not obtained in accordance with the prices set by the state shall not be entitled to this policy.
Medical services refer to the services of medical service organizations in examining, diagnosing, treating, rehabilitating and providing preventive health care, midwifery and family planning to patients, as well as the business of providing medicines, medical materials and appliances, ambulances, ward accommodations and meals in connection with these services (hereinafter referred to as the same).
2) Preparations produced for self-use by non-profit medical institutions are exempted from value-added tax.
(2) Tax Policy on For-profit Medical Institutions
All taxes shall be levied on the income earned by for-profit medical institutions in accordance with the regulations. However, in order to support the development of for-profit medical institutions, for-profit medical institutions that derive income directly for the improvement of medical and healthcare conditions are exempted from value-added tax on their self-produced and self-used preparations for a period of three years from the date of obtaining their practice registration.
(3) Tax Policies on Health Institutions such as Disease Control Institutions and Maternal and Child Health Institutions
Health service revenues (including vaccination and transfer and sales revenues) obtained by health institutions such as disease control institutions and maternal and child health institutions in accordance with prices stipulated by the State are exempted from all taxes. Health service income not obtained in accordance with the prices set by the State shall not enjoy this policy.
(From Cai Shui [2000] No. 42)
3. Blood Stations
The value-added tax (VAT) on clinical blood supplied to medical institutions by blood stations is exempted.
The blood stations referred to in this Circular are public welfare organizations engaged in collecting and supplying clinical blood without profit-making, approved by the State Council or the health administrative departments of the provincial people's governments in accordance with the provisions of the Chinese People's **** and National Blood Donation Law.
This notice shall be implemented from November 1, 1999 onwards.
(From Cai Shui Zi [1999] No. 264)
(XI) Electricity
1. Small Hydroelectric Power Generating Units Below County Level
Electricity produced by small hydroelectric power generating units at county level and below may choose to be subject to value-added tax calculated in accordance with the simple method based on the 6% levy rate.
(From Cai Shui [2009] No.9)
2. Rural Grid Maintenance Fees
From January 1, 1998, the rural grid maintenance fees (including low voltage line loss and maintenance fees as well as electrician's expenses), which are collected by rural electricity control stations from customers together with the tariffs, are exempted from VAT.
(From Cai Shui Zi [1998] No. 047)
Rural grid maintenance fees collected by county power supply limited liability companies after the restructuring of rural electricity management stations are exempted from VAT.
(From Guo Shui Han [2002] No. 421)
3. Oil-fired Power Plants
Generation subsidies obtained by oil-fired power plants from the government's special account do not belong to the stipulated out-of-the-price expenses, are not included in the taxable sales, and are not subject to value-added tax (VAT).
(Extracted from Guo Shui Han [2006] No.1235)
(XII) Tap Water
General taxpayers selling self-produced tap water may choose to calculate and pay VAT according to the simplified method at the rate of 6%; the VAT on the sale of tap water by water supply companies belonging to the general taxpayers is levied according to the simplified method at the rate of 6%, and shall not be offset against the VAT deduction for the water they have purchased. The water company shall not deduct the value-added tax stated on the VAT deduction vouchers for the tap water purchased by the water company.
(From Cai Shui [2009] No.9)
From July 1, 2001, the sewage treatment fees entrusted by governments at all levels and competent authorities to tap water plants (companies) to be collected along with the water tariffs are exempted from value-added tax (VAT).
(From Cai Shui [2001] No. 97)
(xiii) Military Military Industrial System
1. Military System:
Weapons and their spare parts, ammunition, military training equipment, and troop equipments produced by various units of the military system for the troops are exempted from VAT. Clothing for the civilian police produced, sold and allocated to the public security system and the national security system by munitions factories and material supply and distribution units are exempted from value-added tax. Products manufactured by munitions factories in collaboration with each other for the purpose of producing military products are exempted from VAT. Units of the military system are exempted from VAT on business income from processing, repairing and mending of weapons and their spare parts, ammunition, military training equipment and troop equipment.
(From Cai Shui Zi [1994] No.011)
2. Military Industrial System:
Military factories (including scientific research units) belonging to the military industrial system included in the military production plan of the competent military industrial department are exempted from value-added tax for military products sold to the army, the People's Armed Police Force and the military factories in accordance with the principle of military products being sold for value. Weapons and equipment produced and sold by military factories to the public security system, the judicial system and the national security system are exempted from value-added tax. Military factories are exempted from value-added tax on the supply of goods to each other for the production of military products and on the supply of special non-standard equipment, tools, molds, gauges, etc. to each other for the manufacture of military products.
(Extracted from Cai Shui Zi [1994] No.011)
3, except for the military industry and military system enterprises
Except for the military industry and military system enterprises other than the military products produced by the general industrial enterprises, only for the guns, cannons, mines, bullets, military ships, airplanes, tanks, radars, radio stations, diesel engines for naval vessels, all kinds of sights and scopes for artillery, are exempted from value-added tax (VAT) in the assembly enterprises on the finished products of assembly. Enterprises are exempted from VAT on finished products of general assembly.
(Extracted from Cai Shui Zi [1994] No.011)
4. Allocation of Materials
Military goods and goods produced by munitions factories or allocated by munitions departments exported by units of the military system are exempted from value-added tax (VAT) at the production stage, and there is no longer any refund for export.
(Extracted from Cai Shui Zi [1994] No. 011)
The army material supply organizations transferring and supplying materials within the army system, in principle, use the army's material transfer valuation list, and the army's internal transferring and supplying materials are exempted from the value-added tax (VAT).
(Extracted from Guo Shui Fa [1994] No.121)
Steel, timber, cement, coal, camping tools, medicines, boilers and sewing machines produced by the enterprises belonging to the army system and distributed or sold within the army system according to the principle of valuation of military products are exempted from value-added tax. All external sales are subject to value-added tax according to the regulations.
(From Cai Shui Zi [1997] No. 135)
(xiv) Public Security and Judicial Departments
Reconnaissance and security equipment products with listed generation numbers developed and produced by research institutes and public security reconnaissance and security equipment factories belonging to the Ministry of Public Security for the use of public security, judiciary and the national security system are exempted from value-added tax (VAT). Clothing for the civilian police produced and sold by the labor reform factories for use in the public security, judicial and national security systems shall be exempted from value-added tax.
(From Cai Shui Zi [1994] No. 29)
(15) Financial Assets
1. Asset Companies
The main bodies enjoying preferential tax policies are China Cinda Asset Management Company, China Huarong Asset Management Company, China Great Wall Asset Management Company and China Oriental Asset Management Company, which were approved by the State Council to be established, and their branches, which are approved to be distributed in different places. Unless otherwise stipulated, asset management companies shall not be subject to the policy. Unless otherwise provided, enterprises belonging to or affiliated with the asset companies shall not enjoy the preferential tax policies of the asset companies.
If an asset company accepts the non-performing claims of a relevant state-owned bank and the borrower offsets the principal and interest of the loan with goods, real estate, intangible assets, securities and notes, the asset company shall be exempted from the value-added tax and business tax payable on the sale and transfer of such goods, real estate, intangible assets, securities and notes, as well as the use of such goods and real estate to engage in the business of financial leasing.
(From Cai Shui [2001] No. 10)
2. Financial institutions
The subjects enjoying preferential tax policies refer to the financial institutions and their branches located in various places which are abolished by the People's Bank of China according to the decision of the law, including the abolished commercial banks, trust and investment companies, financial companies, financial leasing companies, urban credit unions and rural credit unions. Unless otherwise provided, enterprises belonging to or affiliated with the revoked financial institutions shall not enjoy the tax incentives for the revoked financial institutions as stipulated in this Circular.
When the property of a revoked financial institution is used to settle debts, the revoked financial institution shall be exempted from the value-added tax, business tax, urban maintenance and construction tax, surcharge on education fees and land value-added tax payable on the transfer of goods, immovable property, intangible assets, marketable securities and bills.
(From Cai Shui [2003] No. 141)