the State Administration of Taxation

Notice of the State Administration of Taxation on Printing and Distributing the Measures Governing Tax Refund (Exemption) of Exported
Goods (For Trial Implementation)

Guo Shui Fa [2005] No.51

The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and the cities
specifically designated in the state plan and all the entities thereof:

With a view to regulating the administration on tax refund (exemption) of exported goods, the State Administration of Taxation has
formulated the Measures Governing Tax Refund (Exemption) of Exported Goods (For Trial Implementation) according to the Law of the
People’s Republic of China on the Administration of Tax Collection, the Detailed Rules for the Implementation of the Law of the People’s
Republic of China on the Administration of Tax Collection, the Interim Regulations of the People’s Republic of China on Value-added
Taxes, the Interim Regulations of the People’s Republic of China on Consumption Taxes and other provisions of the state on tax refund
(exemption) of exported goods. which are hereby printed and distributed to you. Please implement them accordingly.

The State Administration of Taxation

March 16, 2005

Measures Governing Tax Refund (Exemption) of Exported Goods (For Trial Implementation)

Chapter I General Provisions

Article 1

With a view to regulating the administration on tax refund (exemption) of exported goods, the present Measures are formulated according
to the Law of the People’s Republic of China on the Administration of Tax Collection, the Detailed Rules for the Implementation of
the Law of the People’s Republic of China on the Administration of Tax Collection, the Interim Regulations of the People’s Republic
of China on Value-added Taxes, the Interim Regulations of the People’s Republic of China on Consumption Taxes and other provisions
of the state on the tax refund (exemption) of exported goods.

Article 2

As for the goods exported by an exporter on his own or by entrustment, except that there are otherwise provisions, the exporter thereof
may, after the declaration of goods to customs for export and the financial settlement for sales, make a report to the local state
taxation bureau (hereinafter referred to as the tax organ) for the approval of refund or exemption of his value-added tax (VAT) or
consumption tax upon the strength of relevant certificates.

The term “exporter” as mentioned in the present Measures includes foreign trade operators, manufacture enterprises without the qualification
for export operation that entrust others for their export, and the special enterprises and personnel of tax refund (exemption).

The term “foreign trade operator” refers to those artificial persons, other organizations or individuals, which/who have gone through
the formalities for the industry and commerce registration or other formalities for practicing his profession, and have been granted
the qualification for export operation by the Ministry of Commerce or its authorized entities and engage in business operation of
foreign trade. Particularly, the term “individual” (including foreigners) refers to any person who has been registered to start an
individual household of industry and commerce, an individual sole-capital enterprise or a partnership enterprise.

The term “special enterprises and personnel of tax refund (exemption)” refers to the enterprises and personnel who may, according
to the relevant provisions of the state, apply for the tax refund (exemption) of exported goods.

Article 3

The scope of tax refund (exemption) of exported goods, the tax refund rate and the methods for tax refund (exemption) shall be subject
to relevant provisions of the state.

Article 4

The tax organ shall, in light of the procedures for tax refund (exemption) of exported goods and the actual requirements of work,
set up corresponding posts for the recognition administration of tax refund (exemption) for exported goods, the acceptance of declaration,
the preliminary examination, reexamination, investigation, examination and approval, withdrawal from and adjustment of the state
treasury and others, and the post responsible system as well. Where there needs “one person holding several posts concurrently” due
to the shortage of personnel, the arrangement of personnel shall be subject to the post supervision and restriction mechanism.

Chapter II The Recognition Administration of Tax Refund (Exemption) for Exported Goods

Article 5

Where a foreign trade operator has gone through the registration formalities for archival filing in accordance with the Foreign Trade
Law of the People’s Republic of China and the Measures for the Registration of Foreign Trade Operators for Archival Filing of the
Ministry of Commerce, and if a manufacture enterprise without the qualification for export operation entrusts any other enterprise
to export self-manufactured products (including those products that are deemed as self-manufactured products, hereinafter the same),
it shall, within 30 days as of the day of registration for archival filing or the conclusion of the contact for export as an agent
and upon the strength of relevant materials, fill in the Recognition Form of Tax Refund (Exemption) for Exported Goods and go to
the local tax organ to go through the recognition formalities for tax refund (exemption) of exported goods.

The recognition formalities for tax refund (exemption) of exported goods of those special enterprises and personnel of tax refund
(exemption) shall be gone through according to relevant provisions of the state.

Article 6

Where an exporter has gone through the recognition formalities for tax refund (exemption) of exported goods, and if there is any change
of the recognition content thereof, he shall, within 30 days as of the day when the approval for alteration is granted by the relevant
administrative organ, apply to the tax organ for going through the recognition alternating formalities for tax refund (exemption)
of exported goods upon the strength of relevant certificates.

Article 7

Where the tax refund (exemption) of exported goods shall be terminated according to laws due to matters such as dissolution, bankruptcy
or withdraw of an exporter, he shall go to the tax organ to go through the cancellation formalities for the recognition of tax refund
(exemption) of exported goods upon the strength of the relevant certificates and materials.

As for any exporter who applies for recognition cancellation, the tax organ shall settle the amount for tax refund (exemption) of
exported goods before going through the formalities for cancellation of the recognition according to relevant provisions.

Chapter III Declaration and Acceptance of Tax Refund (Exemption) of Exported Goods

Article 8

An exporter shall, within the prescribed time limit, gather all the documentations required for tax refund (exemption) of exported
goods, obtain the electronic declaration data by using the electronic declaration system of tax refund (exemption) of exported goods
as acknowledged by the State Administration of Taxation, faithfully fill in the Declaration Form of Tax Refund (Exemption) of Exported
Goods and apply to the tax organ for going through the formalities for tax refund (exemption) of exported goods. In case any exporter
fails to submit his declaration within the prescribed time limit, except that there are otherwise provisions, the tax organ may not
accept the said delayed declaration of tax refund (exemption). Those who need to pay the tax evaded thereof shall pay the duty according
to relevant provisions.

Article 9

Where an exporter declares for tax refund (exemption) of exported goods, the tax organ shall accept it in a timely manner and carry
out a preliminary examination. Upon the preliminary examination, if the declaration materials, electronic declaration data and paper
certificates as reported by the exporter are complete, the tax organ shall accept the declaration for tax refund (exemption) of exported
goods; if the declaration materials or paper certificates as reported by the exporter are incomplete, except it is otherwise prescribed,
the tax organ shall not accept the declaration for tax refund (exemption) of exported goods, and immediately require the exporter
to make corrections and supplement the relevant materials and certificates.

The tax organ shall, after accepting an exporter’s declaration for tax refund (exemption) of exported goods, send a return receipt
to the exporter and make registration of the declaration for tax refund (exemption) of exported goods.

Article 10

Where the materials and paper certificates for declaration for tax refund (exemption) of exported goods as reported by an exporter
are complete, except it is otherwise prescribed, the tax organ shall, before the expiration day of the prescribed time limit for
declaration, not refuse to accept the declaration for tax refund (exemption) of exported goods for such reasons as the absence of
relevant electronic information and the inconsistency of the electronic information upon verification.

Chapter IV Verification, Examination and Approval of Tax Refund (Exemption) of Exported Goods

Article 11

The tax organ shall use the electronic management system of tax refund (exemption) for exported goods as acknowledged by the State
Administration of Taxation and the data of tax refund rate for export as distributed by the State Administration of Taxation, carry
out the verification, examination and approval for tax refund (exemption) of exported goods according to relevant provisions, and
shall not change at will the verification setup of the electronic management system for tax refund (exemption) of exported goods,
the data of tax refund rate for export or the relevant electronic information as accepted.

Article 12

The tax organ shall, after accepting a declaration for tax refund (exemption) of exported goods from an exporter, conduct examination
on the legality and accuracy of declaration certificates and materials within the prescribed time limit, and shall verify the logic
corresponding relation between the declaration data. Pursuant to different situations of declarations for tax refund (exemption)
of exported goods from exporters, the tax organ shall pay emphasis on the following contents during the examination and verification:

(1)

Whether the categories, contents of and seals in the declaration statements for tax refund (exemption) of exported goods are complete
and accurate or not;

(2)

Whether the electronic data as provided in the declaration for tax refund (exemption) of exported goods are in consistency with the
declaration form of tax refund (exemption) of exported goods or not; and

(3)

Whether the certificates for the declaration for tax refund (exemption) of exported goods are effective and in consistency with the
detailed content of the Declaration Form of Tax Refund (Exemption) of Exported Goods or not. The certificates that are subject to
verification on focus are as follows:

1.

The declaration form of tax refund for exported goods (exclusively used for tax refund for export): The declaration form of tax refund
for exported goods shall be the original form, which is affixed with the customs seal and is indicated with such words as “exclusively
used for tax refund for export” (except it is otherwise provided for). Such contents as the customs serial number, customs code of
the exporter, export date, the commodity serial number, export volume and off-shore price shall match with those in the statement
of declaration for tax refund (exemption).

2.

The certificate for export as an agency: Such contents as the name of the entrusted enterprise, the code of exported goods, export
volume and off-shore price thereof shall match with those in the declaration form of exported goods (exclusively used for tax refund
for export), and shall be in consistency with the statement of declaration of tax refund (exemption).

3.

The special VAT invoice (deducting slip): The special VAT invoice (deducting slip) shall be affixed with complete seals and of no
alteration. Such contents as the issuance date, number, amount and tax rate thereof shall be in consistency with those in the statement
of declaration of tax refund (exemption).

4.

The verification form of remittance inward by export (or the verification certificate list of remittance inward by export, hereinafter
the same): Such contents as the serial number, the amount, the name of exported goods of the verification form of remittance inward
by export thereof shall be in consistency with the approval number, off-shore price and names of export goods as indicated in the
corresponding declaration form of exported goods; and

5.

The payment form of consumption taxes (exclusively used for exported goods). The content as filled in each column of the payment form
of consumption taxes (exclusively used for exported goods) shall be in line with the corresponding invoice. The seals of the tax
collection organ and the state treasury (banks) shall be complete and satisfy the relevant requirements.

Article 13

After the manual verification on the certificates and materials of tax refund (exemption) of exported goods as declared, the tax organ
shall conduct a computer verification by using the electronic management system of tax refund (exemption) of exported goods to verify
such electronic information as the electronic data, certificates and materials as declared by exporters for tax refund (exemption)
of exported goods, and the declaration form of exported goods, the verification form of remittance inward by export, the certificate
of export as an agency, the special VAT invoice and the payment form of consumption taxes (exclusively used for exported goods) as
transferred by the State Administration of Taxation and the relevant departments. The emphasis of examination and verification shall
be attached on to the following:

(1)

The electronic information of the declaration form of exported goods: Whether such items as the customs serial number, export date,
commodity code, export volume and off-shore price of the declaration form of exported goods are in consistency with the declared
electronic information upon ratification or not;

(2)

The electronic information of the certificate of export as an agency: Whether such items as the serial number, commodity code, export
date and export off-shore price are in consistency with the declared electronic information upon ratification or not;

(3)

The electronic information of the verification form of remittance inward by export: Whether such items as the number of the verification
form of remittance inward by export are in consistency with the declared electronic information upon ratification or not;

(4)

The data of tax refund rate for export: Whether or not the goods of tax refund (exemption) as declared by exporters fall into the
category of the goods whose tax may be refunded or not, and whether the tax refund rate as declared is in consistency with that in
the data of tax refund rate for export or not;

(5)

The electronic information of the special VAT invoice: Whether the issuance date, amount, tax amount, the identification numbers of
the purchaser and seller, invoice code, invoice number are in consistency with those in the special VAT invoice upon ratification
or not.

When checking any special VAT invoice, the examination and investigation assistance information concerning the special VAT invoice
shall be adopted. Where the examination and investigation assistance information on the special VAT invoice hasn’t been received
for the time being, the tax organ may firstly use the organization information of the special VAT invoice, and shall conduct a re-examination
over the relevant examination and investigation assistance information on the special VAT invoice in a timely manner. Where anything
wrong is found upon the re-examination, the tax amount as refunded or exempted shall be retrieved in a timely manner.

(6)

The electronic information of the payment form of consumption taxes (exclusively used for exported goods): Whether such items as the
number, the customs code of the purchasing enterprise, tax assessment amount, tax rate (amount) of the payment form of consumption
taxes (exclusively used for exported goods) are in consistency with the electronic information upon ratification or not.

Article 14

Where a taxation organ, during the process of verification, finds out that any certificate or material as declared fails to be in
line with the relevant provisions, it shall notice the relevant exporter and requires him to make adjustment or make a new declaration.
Any doubtful point as found during the computer examination shall be subject to strict treatment according to relevant provisions.
Where there comes up any question concerning the certificates or materials of tax refund (exemption) of exported goods as declared
by exporters, the following treatments shall be imposed respectively according to the different circumstances:

(1)

Where there is no electronic information for the certificates or materials of tax refund (exemption) of exported goods as declared
by exporters or any inconsistency is found therein, verification shall be conducted according to relevant provisions in a timely
manner;

(2)

Where there is any question in such paper certificates as the declaration form of exported goods (exclusively used for tax refund
for export) and verification form of remittance inward by export, a letter shall be sent to relevant departments for verification;

(3)

Where there is any question in the special VAT invoice as produced by the forge-preventing tax control system, an application shall
be filed to the taxation investigation department at the same level to conduct a verification through the special VAT invoice assistance
investigation system of the taxation system; or

(4)

Where there is any question in such aspects as the goods source, tax payment or the supplying enterprise as declared by an exporter,
the tax organ shall, according to relevant provisions of the State Administration of Taxation, conduct a letter investigation, or
file an application to the taxation investigation department at the same level that shall conduct investigation according to relevant
provisions, and cope with the matter pursuant to the reply letter and the information of investigation.

Article 15

Where the application by an exporter for handling the certification of the relevant tax refund (exemption) of exported goods accords
with the relevant provisions upon examination of a tax organ, the tax organ shall provide the relevant certification in a timely
manner.

Article 16

The tax refund (exemption) of exported goods shall be subject to the examination and approval of tax organs at or above the level
of cities divided into districts and autonomous prefectures according to the examination results and relevant provisions.

The tax organ shall, after the examination and approval, go through the formalities for withdrawal from or adjustment of the state
treasury according to relevant provisions.

Chapter V Daily Administration of Tax Refund (Exemption) of Exported Goods

Article 17

The tax organ shall announce the relevant policies and provisions for tax refund (exemption) of exported goods and reinforce the work
of publicity, instructions and training for exporters.

Article 18

The tax organ shall well plan for the tax refund (exemption) of exported goods, and do a good job in the analysis and report of the
implementation thereof. The tax organ shall handle the withdrawal from or adjustment of the state treasury within the plan of tax
refund (exemption) for export as ordered by the State Administration of Taxation.

Article 19

Under the following circumstances, the tax organ shall settle the amount of tax refund (exemption) of exported goods in a timely manner:

(1)

There is any dissolution, bankruptcy or withdraw of an exporter and any other matter due to which the tax refund (exemption) for export
shall be terminated; or the recognition of tax refund (exemption) of exported goods has been written off; or

(2)

Any exporter violates any of the relevant policies or regulations of the state and is suspended from the right of tax refund (exemption)
for a certain period.

Article 20

The tax organ shall establish an appraisal mechanism and a supervision and control mechanism for tax refund (exemption) of exported
goods so as to strengthen the administration on tax refund (exemption) of exported goods and prevent any case of tax fraud.

Article 21

The tax organ shall, according to relevant provisions, do a good job in the acceptance, use and administration of the electronic data
concerning tax refund (exemption) of exported goods, safeguard the security of the electronic management system of tax refund (exemption)
of exported goods and effectively backup electronic data and conduct equipment maintenance.

Article 22

The tax organ shall establish an archival filing administration system for the certificates and materials concerning tax refund (exemption)
of exported goods, which shall be kept on file for 10 years, with the exception that it is otherwise provided for by laws and administrative
regulations. The specific measures for the administration shall be formulated by the state taxation bureaus at the provincial level.

Chapter VI Treatment for Rule Breaking

Article 23

Where an exporter conducts any of the following acts, the tax organ shall impose punishments upon it/him according to Article 60
of the Law of the People’s Republic of China on the Administration of Tax Collection:

(1)

failing to go through the formalities for recognition, alteration or writing off of the tax refund (exemption) of exported goods;
or

(2)

failing to establish, use and keep the relevant books, certificates and materials concerning the tax refund (exemption) of exported
goods according to relevant provisions.

Article 24

Where any exporter refuses the examination by tax organs or refuses to provide the relevant books, certificates or materials concerning
tax refund (exemption) of exported goods, the tax organ shall impose punishments upon it/him according to Article 70 of the Law
of the People’s Republic of China on the Administration of Tax Collection.

Article 25

Where any exporter cheats any tax refund by making any false report of his export or any other cheating methods, the tax organ shall
impose punishments upon it/him according to Article 66 of the Law of the People’s Republic of China on the Administration of Tax
Collection.

Those exporters who have cheated any tax refund by fraud shall be suspended of the right of tax refund for 6 months or more upon the
approval of the state taxation bureaus above the provincial level (including the provincial level). During the suspension of the
right of tax refund, no formalities for tax refund (exemption) may be gone through for exported goods that are self operated, or
are operated by means of entrustment and agency.

Article 26

Where an exporter violates the provisions, and measures of tax reserve and compulsory implementation shall be adopted, the tax organ
shall carry out the work according to relevant provisions of the Law of the People’s Republic of China on the Administration of Tax
Collection and the Detailed Rules for the Implementation of the Law of the People’s Republic of China on the Administration of Tax
Collection.

Chapter VII Supplementary Provisions

Article 27

Any other matter that hasn’t been described in the present Measures shall be subject to the relevant provisions of the Law of the
People’s Republic of China on the Administration of Tax Collection and the Detailed Rules for the Implementation of the Law of the
People’s Republic of China on the Administration of Tax Collection and other laws and administrative regulations.

Article 28

The power to interpret the present Measures shall remain with the State Administration of Taxation.

Article 29

The present Measures shall go into effect as of May 1, 2005. Where there is any provision as issued before inconsistent with the present
Measures, the present Measures shall prevail.