Provisional Rules of the People’s Republic of China on Stamp Duty

(Promulgated 6 August 1988 by the State Council)

Article 1. All units and individuals which conclude or receive any of the documents listed in these Rules shall be regarded as obligatory payers of stamp duty (hereinafter referred to as taxpayers) and shall pay stamp duty in accordance with the provisions of these Rules.

Article 2. The following documents shall be regarded as taxable documents:

(1) documents issued for purchase and sale transactions, process contracting, property leasing, commodity transportation, storage and custody of goods, loans, property insurance, technology contracts and other documents of a contractual nature;

(2) documents of transfer of property title;

(3) business books of account;

(4) documentation of rights or licences;

(5) other documents determined by the Ministry of Finance to be taxable.

Article 3. A taxpayer shall calculate the amount of stamp duty payable in accordance with the nature of the taxable documents. Some calculations shall be based on the proportional tax rate, while others shall be in accordance with the quota amount. Determination of detailed tax rates and amounts of tax to be paid shall be undertaken in accordance with the Stamp Duty Tariff Table attached to these Rules.

Stamp duty shall be exempted if the taxable amount does not exceed one jiao (1/10 of a yuan or 10 fen).

If, in a case where the taxable amount exceeds one jiao, the round-off difference is less than 5 fen, the amount shall not be included. Calculations for amounts of 5 fen or more shall be in accordance with that for one jiao.

Article 4. The following documents shall be exempt from stamp duty:

(1) duplicate copies or written copies of documents on which stamp duty has already been paid;

(2) documentation in a case where a property owner donates property to the government, a social welfare unit or school;

(3) other documents which the Ministry of Finance approves as being exempt from stamp duty.

Article 5. The stamp duty payment method shall be implemented through the taxpayer’s voluntary calculation of the payable amount in accordance with regulations and the purchase and attachment of a sufficient number of duty stamps.

In order to simplify stamp duty procedures, a taxpayer may, in a case where the payable amount is relatively large or the stamps are required often, apply to the taxation authority for approval to use payment slips instead of duty stamps, or for authorisation to calculate and pay the total amount due periodically.

Article 6. Duty stamps shall be affixed to taxable documents and the taxpayer shall mark each stamp with a seal or drawn line too signify its cancellation.

A duty stamp which has already been attached to a document may not be reused.

Article 7. Duty stamps shall be attached to taxable documents at the time of their drawing up or receipt.

Article 8. If the same document if signed by two or more parties and a copy is issued to all of the parties concerned, each party shall be responsible for attaching to its respective copy duty stamps for the full amount of stamp duty due as stated in the document.

Article 9. If a document on which stamp duty has already been paid is amended, resulting in the increase of the taxable amount, supplementary stamps shall be purchased and affixed for the increased amount.

Article 10. The taxation authorities shall be responsible for administering the levying of stamp duty.

Article 11. The State Taxation Bureau shall supervise the production of duty stamps. The unit used to indicate the sum of money on the stamp face shall be Renminbi.

Article 12. A unit which issues or handles taxable documents shall be responsible for supervising the payment of stamp duty by taxpayers in accordance with the law.

Article 13. The taxation authorities shall impose a fine, according to the seriousness of the case, if a taxpayer is found to have been involved in any of the following acts:

(1) In a case of failure to attach, or attaching an insufficient number of stamps to a taxable document, the taxation authority, in addition to ordering the taxpayer to attach the appropriate number of stamps, may impose a fine of up to 20 times the amount of stamp duty payable.

(2) In a case of violation of the provisions of paragraph 1 of Article 6 of these Rules, the taxation authority may impose a fine of up to 10 times the amount of the stamps which were not cancelled.

(3) In a case of violation of the provisions of paragraph 2 of Article 6 of these Rules, the taxation authority may impose a fine of up to 30 times the amount of the reused stamps.

If duty stamps are forged, the taxation authority shall ask the judicial organs to investigate criminal liability in accordance with the law.

Article 14. In addition to the provisions of these Rules, administration of the levying of stamp duty shall be handled in accordance with the relevant provisions of the Provisional Rules of the People’s Republic of China for the Administration of Tax Revenue Levying and Collection.

Article 15. The Ministry of Finance shall be responsible for interpreting these Rules and for formulating detailed implementing rules.

Article 16. These Rules shall take effect from 1 October 1988.

Appendix: Stamp Duty Tariff Table

Item Scope Tax Rate Taxpayer Explanation

1. Purchase and sale contracts, including contracts of supply, prepurchase, purchase for an organisation or enterprise, purchase and sale combinations and co-operation, adjustment, compensation, barter etc., shall be subject to stamp duty of 0.03% of the purchase of sale price, to be paid by the parties to the contract.

2. Process contracting contracts, including processing, specific orders, renovations, repairs, printing, advertising, mapping and testing, shall be subject to stamp duty of 0.05% of the income from processing or other contracting work, to be paid by the parties to the contract.

3. Engineering project reconnaissance and design contracts, including prospecting contracts and design contacts, shall be subject to stamp duty of 0.05% of fees received, to be paid by the parties to the contract.

4. Construction and installation project contracts, including construction contracts and installation contracts, shall be subject to stamp duty of 0.03% of the contract amount, to be paid by the parties to the contract.

5. Property leasing contracts, including contracts for the leasing of housing, vessels, aircraft, motorised vehicles, machinery, tools and equipment, shall be subject to stamp duty of 0.1% of the leasing fee, to be paid by the parties to the contract. Stamp duty of 1 yuan shall be paid if the payable amount is less than 1 yuan.

6. commodity transportation contracts, including contracts for the transport of goods by civil aircraft, rail, ship, river and road and co-ordinated transport contracts shall be subject to stamp duty of 0.05% of the transport costs, to be paid by the parties to the contract, Shipping documents shall be used as a contract and stamp duty shall be paid as for a contract.

7. Storage and custody contracts, including storage contracts and custody contracts, shall be subject to stamp duty of 0.01% of the storage or custody service fee, to be paid by the parties to the contract. Warehouse receipts shall be used as a contract and stamp duty shall be paid as for a contract.

8. Loan contracts signed between banks or other financial institutions and borrowers (not including inter-bank short-term loans on which interest is calculated daily) shall be subject to stamp duty of 0.005% of the amount borrowed, to be paid by the parties to the contract. Receipts shall be used as a contract and stamp duty shall be paid as for a contract.

9. Property insurance contracts, including property, liability, guarantee and credit insurance contracts, shall be subject to stamp duty of 0.003% of the insured amount, to be paid by the parties to the contract, Receipts shall be used as a contract and stamp duty shall be paid as for a contract.

10. Technology contracts, including technology development, transfer, consultancy and service contracts, shall be subject to stamp duty of 0.03% of the stated value, to be paid by the parties to the contract.

11. Documents of transfer of property rights, including documents of transfer of property titles, copyright, exclusive right of use of trademarks, patents and proprietary technology usage rights, shall be subject to stamp duty of 0.05% of the stated value, to be paid by the party which initiated the contract.

12. Business books of account, namely books of account for production and business operations and account books for the recording of funds, shall be subject to stamp duty of 0.05% of the total amount of the original value of fixed assets and the enterprise’s own working capital funds, to be paid by the party which established the books of account. Other books of account shall have stamp duty levied at 5 yuan per book.

13. Documentation of rights and licences, including certificates of housing property rights, industrial and commercial business licences, trademark registration certificates, patent certificates and land use certificates, shall be subject to stamp duty of 5 yuan per document, to be paid by the document recipient.