Provisional Regulations of the People's Republic of China on Stamp Tax

Article 1 All units and individuals who execute or receive documents which are in the categories specified in these regulations and within the borders of the People's Republic of China are taxpayers liable to Stamp Tax (hereinafter referred to simply as "taxpayers") and shall pay Stamp Tax according to the provisions of these regulations.

Article 2 The following categories of documents shall be regarded as taxable documents:

A. Purchases and sales, undertaking of processing, undertaking of construction projects, property leasing, commodity transport, warehousing, loans, property insurance, technology contracts and documents of a contractual nature;

B. documents used to transfer property rights;

C. business account books;

D. certificates which give rights or licenses;

E. and other documents which the Ministry of Finance determines to be taxable.

Article 3 A taxpayer shall calculate the amount of tax due on the basis of a flat tax rate or a fixed amount per document, according to the nature of the taxable document. The specific tax rate or the amount of tax shall be determined with reference to the Table of Stamp Taxable Items and Tax Rates accompanying these Regulations. Where the amount of tax payable is less than one jiao, the tax is exempt.

Where the amount of tax payable is one jiao or more, an odd-amount not exceeding five fen shall not be included; where the odd amount is five fen or more, the tax shall be calculated to the nearest jiao.

Article 4 The following documents are exempt from Stamp Tax:

A. copies or transcripts of documents on which Stamp Tax has already been paid;

B. documents executed when property owners donate property to the Government, social welfare units or schools;

C. other documents approved by the Ministry of Finance for exemption from Stamp Tax.

Article 5 To carry out the payment of Stamp Tax the taxpayer shall, following regulations, calculate the amount of tax due and purchase and affix, at one time, a corresponding value of Tax Stamps (hereinafter referred to simply as 'stamping')In order to simplify the stamping procedures when the amount of tax is relatively large or where frequent stamping is necessary, taxpayers may apply to the taxation authorities to use a tax payment account or a periodic payment method instead of stamping.

Article 6 Tax stamps shall be affixed to taxable documents; taxpayers shall cancel each stamp along its border with a seal or drawn line.

Tax stamps that have already been affixed may not be reused.

Article 7 Tax stamps shall be affixed to taxable documents at the time the document is executed or when it is received.

Article 8 Where the same document is signed by two or more parties and each party has one copy, each party shall be responsible for affixing the full amount of Tax Stamps due on its own copy.

Article 9 Where a document on which tax stamps have already been affixed is amended, and results in an increase in its value, an additional amount of tax stamps corresponding to the increase in value shall be affixed to the document.

Article 10 The taxation authorities shall be responsible for administering the collection of Stamp Tax.

Article 11 The State Administration of Taxation shall supervise the printing of tax stamps. The face value of tax stamps shall be denominated in Renminbi.

Article 12 Units issuing or handling taxable documents shall be responsible for supervising the payment of Stamp Tax by taxpayers, according to law.

Article 13 Where a taxpayer has engaged in any of the following, the taxation authorities shall impose penalties according to the seriousness of the case:

A. Where tax stamps were not affixed to a taxable document or insufficient tax stamps were affixed, the taxation authorities may impose a maximum fine of twenty times the amount of tax payable in addition to ordering the taxpayer to affix the correct amount of tax stamps.

B. Where there is a violation of Paragraph 1 of Article 6 of the Regulations, the taxation authorities may impose a maximum fine of ten times the amount of tax stamps that were not canceled by a seal or drawn line.

C. Where there is a violation of Paragraph 2 of Article 6 of the Regulations, the taxation authorities may impose a maximum fine of thirty times the amount of tax stamps that have been reused.

Where tax stamps have been forged, the taxation authorities shall submit the matter to the judicial authorities for criminal investigation according to the law.

Article 14 The management of the Stamp Tax levy, apart from that stipulated in these Regulations, shall be implemented according to relevant regulations in " Provisional Regulations of the People's Republic of China on the Administration of Taxation".

Article 15 These interpretation of these Regulations is the responsibility of the Ministry of Finance; the Detailed Rules for their implementation are determined by the Ministry of Finance.

Article 16 These Regulations take effect as from October 1, 1988.

Table of Stamp Taxable Items and Tax Rates

Items subject to tax	Scope	Tax rates	Persons liable to tax	Explanation
1. Purchase and sales contracts	Including those for supply, advance sales, purchases, linked purchases and sales and contracts of agreement, adjustment, compensation, trade, etc.	Shall pay Stamp Tax of three ten-thousandths of the value of the sale or purchase amount	Issuer of the contract
2. Contract for undertaking processing work	Including contracts for processing, customs work, renovation repairs, printing, advertising, surveying, testing, etc.	hall pay Stamp Tax of five ten-thousandths of the value of the income from processing work	Issuer of the contract
3. Construction project feasibility study contracts	Including testing and planning contracts	Shall pay tax of five ten thousandths of fees received	Issuer of the contract
4.Building and fitting project undertaking contracts	Including building, fitting, engineering undertaking contracts	Shall pay tax of three ten thousandths of the contracted amount	Issuer of the contract
5.Leasing contracts	Including contracts for the leasing of buildings, vessels, aeroplanes, motorized vehicles, machines, apparatuses, equipment, etc.	Shall pay tax of one  thousandth of the rental amount. If the tax liability is less than one yuan, stamp tax will paid on one yuan.	Issuer of the contract
6.Cargo transport contracts	Including contracts for civil air transport, rail transport, sea transport, inland river transport, highway transport and integrated transport	Shall pay tax of five ten thousandths of the transport fees	Issuer of the contract	Shall pay tax according to the vouchers which are applicable to the contract
7. Storage and safeguarding contracts	Including storage and safeguarding contracts	Shall pay tax of one  thousandth of the storage and safeguarding fees	Issuer of the contract	Tax shall be paid according to the storage receipts applicable to the contract
8. Loan contracts	All loan contracts signed by banks, other financial organizations and lending and independent lenders (not including inter-bank lending)	Shall pay tax of 0.5 of one thousandth of the loan amount	Issuer of the contract	Tax shall be paid according to documentary evidence applicable to the contract
9.Property insurance contracts	Including insurance contracts for property, liability, guarantees, credit, etc.	Shall pay tax of one  thousandth of the insurance fee received	Issuer of the contract	Tax shall be paid according to documentary evidence applicable to the contract
10. Technology contracts	Including contracts for technological development, transfer, consulting, service, etc.	Shall pay tax of three ten thousandths of listed value	Issuer of the contract
11. Property transfer documents	Including transfer documentation for property ownership, copyright, business trademarks, special usage rights, patents, special technology usage rights, etc.	Shall pay tax of five ten thousandths of the listed value	Issuer of the contract
12. Business account books	Account books used in production and operation	Account books which record monetary values shall pay tax of five ten thousandths of the sum of actual costs and capital reserves. Other account books shall pay tax of five yuan per book	Issuer of account books
13. Permits for rights and licenses	Including Government department issued documents for building construction, industrial and commercial business, trademark registration certificates, license certificates and land usage certificates	Shall pay tax of five yuan per document	Receiver of document