2020 White Sugar VAT Rate White sugar (white sugar and soft white sugar) is refined sugar made from molasses squeezed from sugar cane and beet. According to different sugar production processes, sugar cane white sugar can be divided into sulfated sugar and carbonized sugar. Due to its longer shelf life and better quality, carbonized sugar is more expensive than sulfurized sugar. Currently, most domestic sugar factories produce sulfurized sugar.
Primary agricultural products refer to unprocessed products from planting, animal husbandry and fishery. In terms of taxation, they are the planting listed in the "Notes on the Scope of Taxation of Agricultural Products" issued by the Ministry of Finance and the State Administration of Taxation. Various plant and animal primary products produced by agriculture, aquaculture, forestry, animal husbandry and aquaculture. Among them, plant agricultural products include various plants mainly used for sugar production, such as sugar cane, sugar beet and other sugar plants.
White sugar is an item refined through industrial processing of sugar plants and is obviously not a primary agricultural product.
White sugar is an industrial product, and the production and sale of white sugar is currently subject to a value-added tax rate of 16% (which will be reduced to 13% in the near future).
In smuggling crimes, parties involved in the investigation stage often do not believe that they are in trouble. I smuggled 1 million worth of sugar. Will I be suspected of evading 2 million yuan in taxes? There are two common situations that lead to this large gap in psychological expectations: one is suspected of smuggling goods with high tax rates, which are so high that it is difficult to understand; second, four people are suspected of committing a crime, and each of the four people paid 1 million. , then each person’s tax-related amount is calculated based on 4 million. Today we will first talk about the calculation of sugar tariff rates, and later we will share with you the legal issues surrounding smuggling. Why do we only talk about the tariff rate on white sugar? Because there is no consumption tax and the value-added tax is fixed at 13%. There is nothing to talk about. The complicated issues lie in the determination of the tariff rate. There are currently six different tariff rates for white sugar: ordinary tax rate, most-favored nation tax rate, tariff quota rate, agreement tax rate, safeguard measure tariff rate, and retaliatory tariff rate. The six tariff rates vary greatly, so they are factors that must be determined when calculating taxes for sugar smuggling. The tax rates mentioned below are all tariff rates and will not be repeated.
1. Ordinary tax rate
The ordinary tax rate on white sugar is 125%, that is, if you import 100 yuan of white sugar, you will have to pay a tariff of 125 yuan. In the past, this tax rate was basically put on the shelf and was basically not used in practice. However, the "Minutes of the Seminar between the Supreme People's Court, the Supreme People's Procuratorate, and the General Administration of Customs on Combating Refined Oil Smuggling in Non-Customs Areas (Shujifa [2019] No. 210), referred to as the "Meeting Minutes"" was released on March 27, 2019 Later, the ordinary tax rate began to become the standard tax rate applicable to smuggling around customs.
Article 3, Paragraph 1 of the "Meeting Minutes" stipulates that smuggling of refined oil products outside the customs place is an illegal trade activity, and the evasion of taxes payable in criminal cases of refined oil smuggling outside the customs place is calculated. The amount shall be determined according to the ordinary tax rate for refined oil products, and the most-favored nation tax rate or provisional tax rate shall not be applied. Paragraph 2 of Article 7 stipulates that issues related to the handling of criminal cases such as smuggling sugar and frozen products outside customs places can be handled in accordance with the law with reference to the spirit of these minutes.
Whether or not you agree with the validity of the "Minutes of the Meeting" itself, in the case of customs bypassing and smuggling, the sugar tariff rate has begun to generally apply to the ordinary tax rate of 125%. In non-customs bypass smuggling, other tax rates may still be applicable.
2. MFN tax rate
The MFN tax rate for white sugar is 50%.
As long as it is a member of the WTO, the most-favored-nation tax rate will apply during normal trade with China. Therefore, in judicial practice, for goods whose origin cannot be ascertained, the most-favored-nation rate is applied to calculate tariffs in accordance with the spirit of lighter suspicion. The "Reply Letter from the Tariff Collection and Administration Department of the General Administration of Customs on the Calculation and Assessment of Tax Evasion on Suspected of Smuggling and Illegal Goods of Unknown Origin" also clarifies that if the origin is unknown and the case-handling department cannot provide evidence, the most-favored-nation tax rate will be applied to calculate and assess tax evasion.
The conditions for dividing the application of ordinary tax rates and most-favored-nation tax rates mainly depend on the method of smuggling. The ordinary tax rate for smuggling around customs, and the most-favored nation tax rate for smuggling that does not go around customs. Smuggling around customs is what the "Minutes of the Meeting" mentioned as smuggling outside customs places. For example, when the moon is dark and the wind is high, sugar is transported from Vietnam to Guangxi from the Beilun River. Smuggling without bypassing customs is also called smuggling through customs, which means formally declaring to the customs, but knowing in your heart that there is something fishy and trying your luck. Common methods include false product names and minimum guarantee prices.
3. Quota tax rate
The tariff rate quota rate is 15%.
The prerequisite for applying tariff quota rates is to obtain the quota. The difficulty is not getting the quota. Most of the sugar quotas are allocated to state-owned enterprises such as COFCO and China Sugar. Those who take desperate measures to smuggle goods will basically not get the quota. Therefore, it is indeed rare for smuggling crimes to be calculated according to the 15% quota tax rate. They have already met the conditions for applying the quota tax rate. It is really unjustifiable and probably unnecessary for them to still smuggle.
4. Agreement tax rate
The agreement tax rate depends on international agreements or arrangements between China and other countries or regions. For example, according to the tax arrangements between Mainland China and Hong Kong, and Mainland China and Macau, white sugar can enjoy a 0-tax treaty tax rate. However, these two places are not important sugar-producing areas, so the agreed tax rate is rarely applied in sugar smuggling cases. For countries such as Thailand that have a great influence on the domestic sugar industry, China will obviously not sign such an agreement on tax rates. On the contrary, it may introduce higher tax rates to counter these major sugar-producing countries' sugar exports to China.
V. Safeguard Measures Tariff Rates
"Ministry of Commerce Announcement No. 26 of 2017 - Announcement on Taking Safeguard Measures on Imported Sugar" (hereinafter referred to as Announcement No. 26) Second Article 1 stipulates that the safeguard measure adopts the method of levying safeguard measure tariffs on imported sugar outside the tariff quota. The implementation period is 3 years. From May 22, 2017 to May 21, 2020, the measures will be gradually relaxed during the implementation period. From May 22, 2017 to May 21, 2018, the tariff rate for safeguard measures is 45%; from May 22, 2018 to May 21, 2019, the tariff rate for safeguard measures is 40%; from May 22, 2019 As of May 21, 2020, the tariff rate for safeguard measures is 35%. Announcement No. 26 also provides exceptions to the conditional non-applicability of safeguard tariffs to specific list countries.
However, according to Announcement No. 58 of 2018 of the People’s Republic of China and the Ministry of Commerce, starting from August 1, 2018, the inapplicable list will be cancelled, and safeguard measures will be uniformly applied to all out-of-quota sugar imports.
Therefore, from August 1, 2018 to May 21, 2020, whether the safeguard tariff on white sugar is applicable only depends on whether there is a quota, not the place of origin. No matter which country the sugar comes from, as long as there is no quota, safeguard tariffs will be levied (except for countries and regions that apply agreement tax rates).
6. Retaliatory tariffs
Retaliatory tariffs are country-specific and are only implemented against specific countries or regions. For example, China currently imposes a 25% tariff on sugar produced in the United States on top of the existing tariffs.
In the calculation of retaliatory tariffs, the white sugar discussed generally in this article should be further detailed according to the import and export tariffs. How to add, subtract or add tariffs is always changing. For example, on February 6, 2020, the "Announcement of the Tariff Commission of the State Council on Adjusting the Measures to Increase Tariffs on Certain Imported Goods Originating in the United States (Tax Commission Announcement [2020] No. 1" was released, stipulating that "from February 2020 Starting from 13:01 on the 14th, the additional tariffs stipulated in the "Announcement of the Tariff Commission of the State Council on the Imposition of Additional Tariffs on Certain Imported Goods Originating in the United States (Third Batch)" (Tax Commission Announcement [2019] No. 4) will be adjusted. Tax rate. The additional tax rate for 270, 646 tax items listed in the first and second parts of Annex 1 of the announcement is adjusted from 10% to 5%; the 64, 737 tax items listed in the third and fourth parts The additional tax rate is adjusted from 5% to 2.5%. "Among them, four tax numbers involve white sugar.
Okay, now that we have studied the six tax rates on sugar, let us review the question at the beginning of the article, why the final tax calculated is often difficult to accept for sugar smuggling suspects. Assume that on January 1, 2020, if 100 yuan of sugar is imported from the United States, how high will the tax rate be? Summarizing the previous analysis, how high is the tariff rate? Specifically, they include: 125% ordinary tariff; 35% safeguard measure tariff; 25% retaliatory tariff. The tariff rate is as high as 185%.
Think again about VAT. The calculation formula for calculating import-link value-added tax is: tax payable = (duty-paid price + actual tariff amount + actual consumption tax amount) × value-added tax rate. For 100 yuan of smuggled sugar, in addition to the 185 yuan tariff, a maximum value-added tax of 37.05 yuan will be incurred.
Calculated in this way, smuggling 100 yuan of sugar may incur a tax of 222.05 yuan.
This is after the value-added tax rate was reduced from 17% to 13%. Sugar smuggling is extremely risky. For individuals, a tax of 100,000 yuan is the starting point; for an organization, a tax of 200,000 yuan is the starting point. If the price of sugar is estimated at 5,000 yuan per ton, if an individual smuggles 10 tons or a unit smuggles 20 tons, he may be sentenced.