Guoshuihan [2002]1170
State Tax Administration (STA)
2002-12-17
State Tax Bureaus of all provinces, autonomous regions, municipalities directly under the central government and municipalities separately listed in the state plan:
After the Circular By State Tax Administration Concerning Several Questions on Export of Goods (Guoshuifa[2000]No.165 was issued, in practice there appear to be no unified understandings and implementations at the local level concerning the four categories of products purchased by manufacture enterprises which can be regarded as self-made products. In order to make it convenient for the locals to implement the export tax refund policy in a right manner, the Circular is so issued regarding defining of the four categories of products exported by manufacture enterprises which are regarded as self-made products:
1. Purchased products by manufacture companies may be regarded as self-made and enjoy export tax refund if they satisfy the following requirements :
1) have the same names and functions as of the self-made products;
2) use registered trademark of the manufacture companies or the trademark licensed by foreign companies; and
3) be exported to the foreign companies that import those self-made products.
2. Should the purchased products be exported as part of a complete set with the self-made products to foreign companies that import the self-made products, they can be regarded as self-made products and enjoy export tax refund if they satisfy the following the requirements:
1) the purchased products are tools, components or parts for the repairing of self-made products; or
2) the purchased products can directly form a complete set with self-made products after exportation without processed by the manufacture companies.
3. For those who fulfill the requirements listed below, the tax authorities in charge of tax refunds may regard them as Group members. When a Group company ) purchases products from member enterprises (or branch plants), it may also be regarded as self-made products and enjoy tax refund.
1) group member enterprises that have been approved by government authorities above county level, or manufacturing enterprises held by a Group Company;
2) both the Group Company and its member enterprises shall implement financial and accounting systems of those of manufacture enterprises and
3) the Group Company must submit proof materials of member enterprises to the tax authorities that are in charge of tax refunds.
4. Commission processing products can be regarded as self-made products and enjoy export tax refunds upon satisfying of all the requirements as follows:
1) the products should have the same names and functions as the self-made products or should be commission processing products using self-made products;
2) the products should be exported to the foreign companies that import self-made products;
3) Consigners should implement the financial and accounting systems of manufacturing companies; and
4) consigners and consignees shall enter into a commission processing agreement. Major materials shall be provided by consigners. Consignees shall not advance payment for consignors but charge a processing fee only, and shall issue value-added invoices on the processing charge including supplementary materials that have been paid in advance for consignors.
5. The tax refund rate, calculation methods and documents of proof required for tax refunds for the above-mentioned purchased products shall comply with Circular by STA Concerning clarification on Implementation of Exemption, Deduction and Refund Methods for Manufacturing Enterprise Exports that are Regarded Self-Made Products (Guoshuifa[2002]No.152).
This translation, together with any explanatory material, is provided courtesy of Lehman Tax & Accounting.
