Legal basis: Provisional Regulations of People's Republic of China (PRC) on Value-added Tax.
Article 1 Units and individuals that sell goods or provide processing, repair and replacement services and import goods within the territory of People's Republic of China (PRC) are taxpayers of value-added tax and shall pay value-added tax in accordance with these regulations.
Article 2 VAT rate:
(1) The tax rate for taxpayers selling or importing goods is 17%, except as provided for in items (2) and (3) of this article.
(2) The taxpayer sells or imports the following goods at the tax rate of 13%:
1. cereals and edible vegetable oils;
2 tap water, heating, air conditioning, hot water, gas, liquefied petroleum gas, natural gas, biogas and coal products for residents;
3. Books, newspapers and magazines;
4. Feeds, fertilizers, pesticides, agricultural machinery and plastic films;
5. Other goods specified by the State Council.
(3) taxpayers export goods at zero tax rate; However, unless otherwise stipulated by the State Council.
(4) Taxpayers provide processing, repair and replacement services (hereinafter referred to as taxable services), and the tax rate is 17%.
The adjustment of tax rate is decided by the State Council.
Article 3 Taxpayers engaged in goods or taxable services with different tax rates shall separately account for the sales of goods or taxable services with different tax rates; If the sales volume is not accounted for separately, a higher tax rate shall apply.
Article 4 Except as stipulated in Article 11 of these Regulations, the taxable amount of taxpayers selling goods or providing taxable services (hereinafter referred to as selling goods or taxable services) is the balance of the current output tax after deducting the current input tax. Calculation formula of tax payable:
Taxable amount-current input tax amount
When the current output tax is less than the current input tax, the insufficient part can be carried forward to the next period for further deduction.