Announcement No. 13 [2018] of the State Administration of Taxation—Announcement on Issuing the Operating Rules for the Administration of Resource Tax Collection

Announcement No. 13 [2018] of the State Administration of Taxation—Announcement on Issuing the Operating Rules for the Administration of Resource Tax Collection Announcement of the State Administration of Taxation (No. 13 [2018]) Announcement of the State Administration of Taxation on Issuing the Operating Rules for the Administration of Resource Tax Collection In order to further regulate the collection of resource taxes, optimize tax payment services, and prevent tax-related risks, the State Administration of Taxation has researched and developed the Operating Rules for the Collection of Resource Taxes, which are hereby issued and shall come into force on July 1, 2018. State Administration of Taxation March 30, 2018 Operating Rules for the Collection of Resource Taxes Chapter I General Provisions Article 1 In order to regulate the collection of resource taxes, these Operating Rules are developed in accordance with the provisions of the Law of the People's Republic of China on the Administration of Tax Collection and the Detailed Rules for Implementation thereof, the Interim Regulation of the People's Republic of China on Resource Tax and the Detailed Rules for the Implementation thereof, and the Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Promoting the Reform of Resource Tax (No. 53 [2016], Ministry of Finance). Article 2 A taxpayer that exploits or produces products subject to resource tax shall file a return of resource tax with the competent tax authority at the place of exploitation or production in accordance with the law. Article 3 The amount of resource tax payable shall be calculated by multiplying the taxable sales amount or sales quantity of taxable products by the applicable tax rate. “Taxable sales amount” means the full price and ex-price fees charged by a taxpayer from the purchaser for selling taxable products, excluding output value-added tax (“VAT”). “Taxable sales quantity” means the sales quantity of the taxable products the tax on which shall be collected by quantity. The sales amounts or sales quantities of crude ores and concentrates shall be calculated separately; otherwise, the higher taxable sales amount or sales quantity shall apply. Where a taxpayer exploits or produces taxable products under different tax items, it shall separately calculate the sales amounts or sales quantities of the taxable products under different tax items; and if it fails to conduct the separate calculation thereof or cannot provide the accurate sales amounts or sales quantities of the taxable products under different tax items, the higher tax rate shall apply. Chapter II Tax Source Administration Article 4 Taxable sales amount or sales quantity shall include the portion from the actual sale of taxable products and the portion from the deemed sale of taxable products. “Deemed sale” shall include the following circumstances: (1) A taxpayer's direct processing of self-exploited crude ores into non-taxable products shall be deemed as a sale of crude ores. (2) A taxpayer's continuous production of non-taxable products with the concentrates obtained by washing (processing) self-exploited crude ores shall be deemed as a sale of concentrates. (3) Investment, distribution, debt repayment, gift and barter, among others, with taxable products shall be deemed as a sale of taxable products. Article 5 Where a taxpayer conducts any act which is deemed as a sale of taxable products but there is no sales price, or the sales price of the taxable products declared by the taxpayer is obviously low without any justified reason, the tax authority shall determine the taxable value of the taxable products in the following order: (1) It shall be determined on the basis of the average sales price of the products of the same kind provided by the taxpayer in the latest period. (2) It shall be determined on the basis of the average sales price of the products of the same kind provided by any other taxpayer in the latest period. (3) It shall be determined on the basis of the composite taxable value of the taxable products. Composite taxable value = Costs x (1 + Cost-profit ratio) ÷ (1- Resource tax rate) (4) It shall be determined after deducting the cost profits in the course of subsequent processing from the sales price of non-taxable products processed thereafter. (5) It shall be determined by any other reasonable means. Article 6 The prices or charges in business transactions between a taxpayer and its associated enterprises shall be collected or paid in a same manner as in business transactions between independent enterprises. Where prices or charges are not collected or paid in the same manner as the business transactions between independent enterprises and results in a reduction of the taxable sales amount, the tax authority may make reasonable adjustments in accordance with the relevant provisi......