Provisional regulations of the people's republic of china on consumption tax

Article 5 

　　The computation of tax payable for Consumption Tax shall follow either the rate on value or the amount on volume method. The formulas for computing the tax payable are as follows: 

　　The tax payable computed under the rate on value method  = Sales amount x Tax rate. 

　　The tax payable computed under the amount on volume method  = Sales volume x Tax amount per unit. 

　　For taxable consumer goods sold by taxpayers where the sales  amounts are computed in foreign currencies, the taxable amounts shall be converted into Renminbi according to the exchange rates prevailing  in  the  foreign exchange market. 

Article 6 
The "sales amount" as stipulated in Article 5 of these Regulations shall be the total consideration and other charges receivable from the buyer for the taxable consumer goods sold by the taxpayer. 

Article 7 

　　Self-produced taxable consumer goods for the taxpayer's own use that  shall be subject to tax in accordance with the stipulations of the first paragraph in Article 4 of these Regulations shall be assessed according to the selling price of similar consumer goods produced by the taxpayer.  If the selling price of similar consumer goods is not available, the tax shall be assessed according to the composite assessable value.   
The formula for computing the composite assessable value is as follows: 
                                    (Cost + profit) 
Composite assessable value = ----------------------------------- 
                                 (1-Consumption Tax rate) 

Article 8 

　　Taxable consumer goods sub-contracted for processing shall be assessed according to the selling price of similar consumer goods of the sub-contractor. If the selling price of similar consumer goods is not available, the tax shall be assessed according to the composite assessable value. 

　　The formula for computing the composite assessable value is as follows: 
                                           (Cost of material + Processing fee) 
 Composite assessable value = -------------------------------------------------  
                                                (1 - Consumption Tax rate) 

Article 9 

　　Imported taxable consumer goods which adopt the rate on value method in computing the tax payable shall be assessed according to the composite assessable value. 

　　The formula for computing the composite assessable value is as follows: 
                                          (customs dutiable value + Customs Duty ) 
Composite assessable value = ------------------------------------------------------
                                               (1 - Consumption Tax rate) 

Article 10

　　Where the taxable value of the taxable consumer goods of the taxpayer is obviously low and without proper justification, the taxable value shall be determined by the competent tax authorities.