The Fifth Meeting of the Standing Committee of the Eighth National People's Congress, having considered the proposal submitted by the State Council on the Application of the Interim Regulations on such taxies as Value-added Tax, Consumption Tax and Business Tax to Enterprises with Foreign Investment and Foreign Enterprises, specifically makes the following decisions with a view to unifying the tax system, balancing the tax burden, improving the investment environment of our country, and catering for the need of establishing and developing the socialist market economy:

1. Before the relevant tax laws are formulated, the Interim Regulations on Value-added Tax, the Interim Regulations on Consumption Tax and the Interim Regulations on Business Tax promulgated by the State Council shall be applicable to enterprises with foreign investment and foreign enterprises from the date of January 1, 1994. The Regulations of the People's Republic of China on Consolidated Industrial and Commercial Tax (Draft) adopted in principle at the 101st Meeting of the Standing Committee of the National People's Congress on September 11, 1958 and promulgated by the State Council for trial implementation on September 13, 1958 shall be nullified on the same date.

Value-added Tax for the Chinese-foreign co-operative exploitation of offshore oil and natural gas shall be collected in kind. The tax rates and measures of collection shall be separately formulated by the State Council.

2. Where the tax burden of the enterprises with foreign investment approved to be established before the date of December 31, 1993 increases due to the imposition of Value-added Tax, Consumption Tax and Business Tax pursuant to Article 1 of this Decision, such enterprises may, upon application to and with the approval of the tax authorities, have a refund on the excess tax paid due to such increased tax burden within the approved operation time-limit, and a maximum time-limit to be approved may not exceed five years. If there is no limit on operation period, the enterprises may, upon application to and with the approval of the tax authorities, have a refund on the excess tax paid due to such increased tax burden for a maximum of five years. The detailed measures shall be formulated by the State Council.

3. Apart from Value-added Tax, Consumption Tax and Business Tax, other types of taxes applicable to enterprises with foreign investment and foreign enterprises shall be implemented in accordance with the laws where there are such provisions; and be implemented in accordance with the stipulations of the State Council where there are no such provisions in the laws.

Enterprises with foreign investment mentioned in this Decision means Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises established within the territories of China.

Foreign enterprises mentioned in this Decision means foreign companies, enterprises and other economic organizations which have set up institutions or places within the territories of China to engage in production or business operations, or though they have not set up any institutions or places, they have income sourced within the territories of China.

This Decision shall enter into force as of the date of promulgation.

Promulgated by The Standing Committee of the National People's Congress on 1993-12-29