Rules for the Implementation of the Provisional Regulations on Stamp Tax of the People‘s Republic of China
(Promulgated on Circular [1988] No. 255 of the State Administration of Taxation, the Ministry of Finance on Sept. 29, 1988)
Article 1 These Rules are formulated in accordance with the provisions of Article 15 of the Provisional regulations on Stamp Tax of the People‘s Republic of China (hereinafter referred to as the Regulations).
Article 2 "Establishing or accepting deeds or other instruments cited in these Regulations within the territory of the People‘s Republic of China" as mentioned in Article 1 of the Regulations refers to those deeds and other instruments of legal effectiveness and protected by the Chinese law in China.
The deeds and other instruments which are established either in or outside China shall be affixed with stamps in accordance with the Regulations.
"Institutions and individuals" mentioned in Article 1 of the Regulations refer to domestic enterprises, undertakings, government institutions, organizations, military units and Chinese-foreign joint ventures, cooperative enterprises, foreign-funded enterprises and foreign companies and enterprises and other economic organizations and individuals in China.
The stamp tax paid by Chinese-foreign joint ventures, cooperative enterprises, foreign-funded enterprises, foreign companies, enterprises and other economic organizations which have paid industrial and commercial consolidated tax may be deducted from the latter.
Article 3 "Contracts of construction projects" mentioned in Article 2 of the Regulations refer to contracts on engineering survey and designing and engineering construction and installation.
Contracts of engineering projects include general contracts and sub-contracts.
Article 4 "Contracts" mentioned in Article 2 of the Regulations refer to those contracts established in accordance with the "Economic Contract Law of the People‘s Republic of China", and "Law of the People‘s Republic of China on Economic Contracts Involving Foreign Interests" and other Chinese laws and decrees on contracts.
"Instruments in the nature of contracts" refer to agreements, title deeds, contracts, vouchers, letters of confirmations and other instruments.
Article 5 "Deeds of transfers of proprietary rights" mentioned in Article 2 of the Regulations refer to deeds on the sale, succession, granting, exchange or severance of the proprietary right established by institutions or individuals.
Article 6 "Business account books" mentioned in Article 2 of the Regulations refer to the financial account books for financial settlements that record the activities of production and business operations of institutions and individuals.
Article 7 The ledgers recording capital activities cited in the Table of Tax Items and Rates refer to the general ledgers and ledgers recording the original value of the fixed assets and the owned floating capital or special ledgers for such purposes.
"Other account books" refer to account books in addition to those mentioned in the previous passages, including journals and all sorts of detailed ledgers.
Article 8 In case a general ledger recording capital having been affixed with stamps on the basis of the total fixed assets and owned floating capital shows an increase of the total capital, the portion in excess of the original amount shall require the affixing of additional stamps in accordance with the regulations.
Article 9 The owned floating capital in the Table of Tax Rates shall be determined in accordance with the provisions of the relevant financial and accounting systems.
Article 10 Stamp tax shall be levied only on the deeds and instruments itemized in the Table of Tax Items and Rates and other deeds and instruments subjected to stamp tax stipulated by the Ministry of Finance.
Article 11 "Duplicates or copies of those deeds on which stamp tax has been paid which shall be exempted from stamp tax" mentioned in Article 4 of the Regulations refer to the fact that stamp tax has already been paid on the originals of the formally signed deeds and the duplicates or copies thereof serve only for reference with no indication of any involvement of interests and liabilities to other parties, thus requiring no affixing of stamps.
Stamps shall be affixed to those duplicates or copies which serve the functions as the original copies in legal force.
Article 12 "Social welfare institutions" mentioned in Article 4 of the Regulations refer to social organizations and establishments serving orphans, widows and widowers without dependents and the disabled.
Article 13 The deeds and instruments itemized below shall be exempt from stamp tax in accordance with the provisions of Clause 3 of Article 4 of the Regulations:
1. Contracts on purchase of farm produce signed between state-appointed purchase departments and villagers‘ committees and farmers;
2. Contracts on interest-free loans and loans with interest discounts;
3. Contracts on preferential loans given by foreign governments and international financial organizations to the Chinese government and financial institutions.
Article 14 The stamping of deeds at the time of establishment or acceptance as mentioned in Article 7 of the Regulations refers to the stamping of a contract at the time of signing, a deed at the time of establishment, an account book at the time of starting entry and a certificate or permit at the time of acceptance.
A contract signed outside China shall be stamped in China.
Article 15 "The parties concerned" mentioned in Article 8 of the Regulations refer to the institutions and individuals with direct involvement of the rights and obligations under the deed or instrument, excluding the guarantor, witness and identifier.
"The parties establishing the contract" as mentioned in the Table of Tax Rates refer to the parties to the contract.
The agent of a party to a contract shall have the obligation of paying tax on behalf of the party concerned.
Article 16 A deed on transfer of proprietary right shall be affixed with stamps by the establisher of the deed and in case no stamps or insufficient stamps are affixed, the holder of the deed shall affix the additional stamps. If a deed is signed in the form of a contract, the parties holding the contract shall stamp the deed in the full amount of the tax.
Article 17 In the case of one deed or instrument recorded with two or more economic items identified with different values thereof, stamp tax shall be assessed separately and then pooled for stamping; and if the records bear no values of the items, the highest rate of tax shall be accounted for the stamp tax for stamping of the document.
Article 18 If a taxable deed to be stamped to the equivalent of the tax payable has no indication of the value of the item, the tax amount shall be assessed on the basis of the quantity of the item at the official price of the State; and in case there is no official price quoted by the State, it shall be assessed at the market price and the tax amount payable shall be assessed at the tax rate.
Article 19 In case the taxable instrument carries the value in a foreign currency, the taxpayer shall convert the sum into RMB at the exchange rate quoted on the same day by the Administration for Exchange Control of the People‘s Republic of China.
Article 20 The affixed stamp on a taxable deed shall be cancelled right away. The taxpayer may impress a seal print on the border of the stamp(s) or cancelled with lines by fountain pen or ballpoint pen. The cancellation mark shall be on the border between the stamps and the taxable document.
Article 21 In the case of a taxable deed with the amount of tax payable exceeding 500 yuan, the taxpayer shall file tax returns or fill tax payment forms to the tax authorities and affix one of the copies thereof on the taxable deed and the tax authorities shall write a verification of the tax payment on the taxable deed as a substitute of the stamps.
Article 22 If stamping of the same types of taxable deeds is of a high frequency, the taxpayer may apply to the tax authorities for making a package payment of the stamp tax.
The tax authorities shall issue permits for pooled tax payment to those institutions approved to pay stamp tax on a consolidated basis. The term for such a pooled payment shall be determined by the local tax authorities but it shall not exceed one month.
Article 23 The instruments to be pooled for payment of stamp tax shall bear a specified seal of the pooled tax payment designated by the tax authorities with added serial numbers and finally bound together into booklets and the copy with stamps or with receipt of the tax payment shall be affixed to the back of the booklet, cancelled with a seal print and kept for the record.
Article 24 In case a document is stamped in excess of the tax payable, the taxpayer shall have no claim to reimbursement of the excess payment or use it to offset other payments.
Article 25 A taxpayer shall keep the evidence of tax payment in good conditions. Those documents on which stamp tax has been paid shall be kept for a term clearly specified by State regulations, and others not specified by state regulations shall be kept for one year after their execution.
Article 26 Should a taxpayer be uncertain as to the necessity of paying stamp tax on an instrument, he should bring the document to the local tax authorities for confirmation.
Should a dispute arise between a taxpayer and the tax authorities over the nature of an instrument, a report with the instrument attached shall be submitted to the higher level of tax authorities for verification.
Article 27 "Institutions distributing and handling taxable deeds" mentioned in Article 12 of the Regulations refer to institutions that issue title deeds or permits and institutions that verify or notarize documents or handle other related matters.
Article 28 "Responsible for the supervision over the tax paying obligations of the taxpayers" mentioned in Article 12 of the Regulations refers to the obligations of supervisions cited below of those institutions issuing or handling taxable deeds and other instruments:
1. To make sure the taxable deeds or instruments have been properly stamped;
2. To make sure the stamps have been affixed in the full amount thereof;
3. To make sure the stamps affixed have been cancelled properly；
4. To make the taxpayer who has not fulfilled the tax payment as cited above affix the stamps on the spot.
Article 29 The face value of the stamps shall be in the denominations of one jiao, two jiao, five jiao, one yuan, two yuan, five yuan, 10 yuan, 50 yuan and 100 yuan, in nine denominations in all.
Article 30 The tax stamps are value securities of which the tax authorities across the country shall exercise strict administration in accordance with the rules to be formulated by the State Administration of Taxation.
Article 31 Tax stamps may be entrusted to institutions or individuals to sell on a commission of 5% of the sales volume. The commissions shall be paid out of the actual sales of the stamps.
Article 32 A tax stamp sales agent shall apply to the local tax authorities for the sales agency and when necessary provide a guarantor. Upon examination and approval of the application by the tax authorities, the tax authorities shall sign a sales agency contract with and issue a permit to the applicant.
Article 33 A tax stamp sales agent shall open a special bank account for depositing the proceeds from the sales of the stamps and make settlements with the local tax authorities in a prescribed time limit or transfer the money directly to the State Treasury via a banking institution. A tax stamp sales agent shall in no way delay delivering or misappropriate the proceeds from stamp sales.
Article 34 A tax stamp sales agent shall be responsible for compensations for any losses to the tax stamps in his custody or the proceeds from the sales thereof.
Article 35 A tax stamp sales agent shall not entrust others to sell the stamps or to sell them in other places, unless it is otherwise provided in the contract.
Article 36 The tax authorities shall exercise guidance, inspection and supervision of the work of tax stamp sales agents who shall not refuse to brief the tax authorities on the operation of the sales.
Article 37 The tax authorities shall exercise inspection over the implementation of stamp tax. In exercising inspection, the tax inspectors shall display the ID cards of tax inspectors. Taxpayers shall make no pretext to refuse tax inspections.
Article 38 Tax inspectors shall take proper measures in dealing with taxable deeds and other instruments in violation of the regulations. If the documents in question need to be brought to the tax authorities, the inspector shall issue a receipt of the instrument in question to the party concerned.
Article 39 Should a taxpayer fail to pay all or part of the stamp tax within the tax payment time prescribed by the tax authorities in violation of the provisions of Article 22 of these Rules, the tax authorities shall order the taxpayer to pay the tax within a new time limit and impose a daily surcharge for overdue tax payment at 5‰ of the tax payment beginning from the first day of the deferral.
Article 40 A taxpayer in violation of the provisions of Article 23 of these Rules shall be fined up to 5,000 yuan in light of the degree of gravity of the case; or be revoked of the permit for pooled payment of the tax if the case is grave.
Article 41 A taxpayer in violation of the provisions of Article 25 of these Rules shall be imposed a fine up to 5,000 yuan.
Article 42 A tax stamp sales agent in violation of the provisions of Articles 33, 35 and 36 of these Rules shall be given a warning or deprived the qualification as an agent in the light of the degree of the gravity of the case.
Article 43 Any organization or individual has the right to inform on a taxpayer‘s conduct of tax dodging by refusing to stamp instruments in accordance with the regulations, and the tax authorities shall award the informer and keep the informer in confidentiality after the information has been proved to be authentic and the case has been properly dealt with.
Article 44 The State Administration of Taxation shall be responsible for the interpretation of these Rules.
Article 45 These Rules shall go into effect as from the day of the promulgation of the Regulations