RepublicofChina on Business Tax> （hereinafter referred to as the
'Regulations'）.
Article2
"Taxableservices"asmentioned in Article 1 of the Regulations
referstoserviceswithinthescopeoftaxableitemsinthecommunications
and transportation, construction, finance and insurance, posts and
telecommunications, culture and sports, entertainment and service
industries.
Processing,repair and replacement are not taxable services as
mentionedintheRegulations（hereinafterreferred to as 'non- taxable
services'）.
Article3
"Theforeignexchange,marketablesecuritiesandfutures buying and
sellingbusiness"asmentionedinItem5ofArticle5of the Regulations
referstotheforeignexchange,marketablesecuritiesand futures buying
andsellingbusinesscarriedonbyfinancialinstitutions（includingbanks
andnon-bankfinancialinstitutions）.Thebuyingand selling of foreign
exchange,marketablesecuritiesorfuturesby non-financial institutions
orindividualsshallnotbesubjecttoBusinessTax.
"Futures"asmentionedinItem5of Article 5 of the Regulations
refertonon-commoditiesfutures.Futures on commodities shall not be
subjecttoBusinessTax.
Article4
"Provisionoftaxableservices,transferofintangibleassetsor the
saleofimmovableproperties"asmentionedinArticle1oftheRegulations
refers to activities of providing taxable services, transferring
intangibleassetsorownershipofimmovablepropertieswithconsideration
（hereinafterreferredtoasthe'taxableactivities'）. However, taxable
servicesprovidedbythestaffemployedbyunitsor individual operators
totheirownunitsoremployersshallnotbeincludedtherein.
Theterm"withconsideration"in the preceding paragraph includes
receiptofcurrency,goodsandothereconomicbenefits.
Forunitsorindividualsthat sell their newly self- constructed
buildings （hereinafter referred to as 'self- construction'）, their
self-constructionactivitiesshallberegarded as provision of taxable
services.
Transfersoflimitedpropertyrights,or permanent rights, to use
immovableproperties,andtransfersbyunitsof immovable properties by
wayofgiftstoothersshallberegardedassalesofimmovableproperties.
Article5
Asalesactivitythatinvolvesbothtaxable services and goods is
deemed to be a mixed sales activity. Mixed sales activities of
enterprises,enterpriseunitsorindividualbusinessoperatorsengaged in
production,wholesaleorretailofgoodsshallbeclassifiedas sales of
goods,andBusinessTaxshallnotbelevied on the sales; mixed sales
activitiesofotherunitsandindividualsshallbeclassifiedasprovision
oftaxableservices,andBusinessTaxshallbeleviedonthesales.
Whethertaxpayers'salesactivitiesaremixedsalesactivities shall
bedeterminedbythecollectionauthoritiesundertheStateAdministration
ofTaxation.
"Goods"asmentionedin Paragraph 1 refers to tangible moveable
goods,includingelectricity,heatandgas.
"Enterprises, enterprise units or individual business operators
engagedintheproduction,wholesaleandretailofgoods"asmentioned in
Paragraph1includeenterprises, units with an enterprise nature and
individualbusiness operators engaged principally in the production,
wholesaleandretailofgoods, and also engaged in taxable services.
Article6
Fortaxpayersengagedinbothtaxableservicesandthesalesofgoods
ornon-taxableservices,thesalesamount of taxable services and the
salesamountofgoodsor non-taxable services shall be accounted for
separately.Fortaxpayersthathavenotaccountedforseparatelyorcannot
accountforaccurately,thetaxableservices and goods and non-taxable
servicesshalltogetherbesubjecttoValueAddedTax, and Business Tax
shallnotbelevied.
Whetherthetaxableservicesengagedconcurrently by taxpayers are
togethersubjecttoValueAddedTax,thistaxshallbedetermined by the
collectionauthoritiesundertheStateAdministrationofTaxation.
Article7
ExceptasotherwisestipulatedinArticle8oftheseDetailed Rules,
anyoneofthefollowingactivitiesshall be regarded as provision of
taxableservices,transferof intangible assets or sale of immovable
propertieswithintheterritoryofthePeople'sRepublicofChina
（hereinafterreferredto as 'within the territory'） as mentioned in
Article1oftheRegulations:
（1）Provisionofservicesoccurswithintheterritory;
（2）Transportationfromwithintheterritoryofpassengersor cargos
tooutsidetheterritory;
（3）Organizationoftouristgroupswithin the territory to travel
outsidetheterritory;
（4）Transferofintangibleassetstobeusedwithintheterritory.
（5）Salesofimmovablepropertieslocatedwithintheterritory
Article8
Anyoneofthefollowing situations shall be providing insurance
serviceswithintheterritory:
（1）Insuranceservicesprovidedbyinsuranceorganizationswithinthe
territory,exceptforinsuranceprovidedfor export goods by insurance
organizationswithintheterritory.
（2）Insuranceservicesprovidedby insurance organizations outside
theterritoryinrelationtogoodswithintheterritory.
Article9
"Units"asmentionedin Article 1 of the Regulations refers to
State-owned enterprises, collectively owned enterprises, private
enterprises,jointstockenterprises,otherenterprisesandadministrative
units,institutions,militaryunits,socialgroupsandotherunits.
"Individuals"asmentionedinArticle1oftheRegulationsrefers to
individualindustrialorcommercialhouseholdsandotherindividuals that
havebusinessactivities.
Article10
Forenterpriseswhichleaseorcontract to other to operate, the
lesseesorsub-contractorsshallbethetaxpayer.
Article11
ExceptotherwisestipulatedinArticle12of these Detailed Rules,
unitsthatareliabletoBusinessTaxshallbe those that have taxable
activitiesandreceivemoney,goodsorothereconomic benefits from the
otherparties.Theyshallincludeunitsbothwithandwithout independent
accounting.
Article12
Thetaxpayerforthebusinessofcentralrailwaytransportationshall
be the Ministry of Railways. The taxpayers for the business of
Sino-foreignequityjointventure railway transportation shall be the
jointventurerailwaycompanies.Thetaxpayersforthebusiness of local
railway transportation shall be the local organization for railway
administration. The taxpayers for the business of provisional
administrationfor infrastructural route transportation shall be the
organizationforprovisionaladministrationforinfrastructuralroutes.
Unitsengagedinthebusinessofwaterway,air, pipeline and other
landtransportationliabletoBusinessTaxshallbethoseunitsengagedin
transportationbusinessandaccountableforprofitorloss.
Article13
Chargesoflegislative,judicialandadministrativeauthorities that
meetthefollowingconditionsshallnotbesubjecttoBusinessTax;
（1）ChargeswhicharepermittedunderofficialdocumentsbytheState
Council,provincial People's governments, or the finance or pricing
departmentsthereunder,andwherethechargingstandardis in accordance
withthestipulationsofthedocuments.
（2）Chargeswhicharecollecteddirectlybythelegislative,judicial
andadministrativeauthoritiesthemselves.
Article14
"Othercharges"asmentionedinArticle5of the Regulations shall
includehandingfees, funds, fund raising fees, receipts on behalf,
paymentonbehalfandotherchargesofeverynature received from other
parties.
Allotherchargesshallbeincludedintheturnoverincomputing the
taxpayableregardlessof the treatments applicable according to the
stipulationsoftheaccountingpolicies.
Article15
Where the prices of the taxpayers providing taxable services,
transferring intangible assets or selling immovable properties are
obviously low and without proper justification, the competent tax
authoritiesshallhavetherighttodeterminethe turnover according to
thefollowingsequence:
（1）Determinedaccordingtotheaverageprices of similar services
providedorsimilarimmovablepropertiessoldbythetaxpayersinthesame
month.
（2）Determinedaccordingtotheaverageprices of similar services
providedorsimilarimmovablepropertiessoldbythetaxpayersinthemost
recentperiod.
（3）Determinedaccordingtothefollowingformula:
Assessable Operating （1+thecostplusmarginrate）
value=costsor X -------------------------------
Projectcosts （1-BusinessTaxrate）
Thecost-plusmarginrateintheaboveformulashallbedeterminedby
thetaxauthoritiesunder the People's governments of the provinces,
autonomousre
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