concerning the original value of the property and is unable to correctly

calculate the original value of the property, the original value of the

property shall be determined by the tax authorities-in-charge.

Article 20

For the purposes of item (5) of the first paragraph of Article 6 of

the Tax Law, the term "reasonable expenses" shall mean relevant expenses

paid in accordance with regulations at the time of sale.

Article 21

For the purposes of items (4) and (6) of the first paragraph of

Article 6 of the Tax Law, the term "each payment" shall mean:

(1) in the case of income from remuneration for personal services,

the amount, if the income is derived in a lump sum, of that lump sum; and,

if the income is of a continuing nature and pertains to the same project,

the income derived during one month;

(2) in the case of income from author#39;s remuneration, the income

derived on each instance of publication;

(3) in the case of income from royalties, the income derived from

each instance of licensing a licensing right;

(4) in the ease of income from the lease of property, the income

derived during one month;

(5) in the case of income from interest, pidends and extra

pidends, the income derived each time interest, pidends or extra

pidends are paid;

(6) in the case of contingent income, each payment of such income

obtained.

Article 22

Tax on income from the assignment of property shall be calculated and

paid on the proceeds of a single assignment of property less the original

value of the property and reasonable expenses.

Article 23

If the same item of income is derived by two or more inpiduals, tax

thereon shall be calculated and paid separately on the income derived by

each inpidual after the deduction of expenses respectively in accordance

with the Tax Law.

Article 24

For the purposes of the second paragraph of Article 6 of the Tax Law,

the term "inpidual income donated to educational and other public

welfare undertakings" refers to the donation by inpiduals of their

income to educational and other public welfare undertakings, and to areas

suffering from serious natural disasters or poverty, through social

organizations or government agencies in the People#39;s Republic of China.

That part of the amount of donations which does not exceed 30 percent

of the amount of taxable income declared by the taxpayer may be deducted

from his amount of taxable income.

Article 25

For the purposes of the third paragraph of Article 6 of the Tax Law,

the term "income from wages and salaries from sources outside China" shall

mean income from wages and salaries derived from the tenure of an office

or employment outside the People#39;s Republic of China.

Article 26

For the purposes of the third paragraph of Article 6 of the Tax Law,

the term: "additional deductions for expenses" shall mean a monthly

deduction for expenses in the amount specified in Article 28 hereof in

addition to the deduction for expenses of RMB 800.

Article 27

For the purposes of the third paragraph of Article 6 of the Tax Law,

the term "the scope of applicability of such additional deductions for

expenses" shall mean:

(1) foreign nationals working in foreign investment enterprises and

foreign enterprises in the People#39;s Republic of China;

(2) foreign experts hired to work in enterprises, institutions,

social organizations and government agencies in the People#39;s Republic of

China;

(3) inpiduals who are domiciled in the People#39;s Republic of China

and derive income from wages and salaries by virtue of their tenure of an

office or employment outside the People#39;s Republic of China; and

(4) other personal as determined by the Ministry of Finance.

Article 28

The standard for the additional deductions for expenses mentioned in

the third paragraph of Article 6 of the Tax Law shall be RMB 3200.

Article 29

Overseas Chinese and Hong Kong, Macao and Taiwan compatriots shall be

treated by reference to Article 26, 27 and 28 hereof.

Article 30

Inpiduals who are domiciled in the People#39;s Republic of China, or

who are not domiciled but have resided in the People#39;s Republic of China

for at least one year shall calculate the amounts of tax payable for

income derived from sources within and outside the People#39;s Republic of

China separately.

Article 31

For the purposes of Article 7 of the Tax Law, the term "income tax

paid to foreign authorities" shall mean the amount of income tax payable,

and actually paid, on income derived by a taxpayer from sources outside

the People#39;s Republic of China, according to the laws of the country or

region from which that income was derived.

Article 32

For the purposes of Article 7 of the Tax Law, the term "the amount of

tax otherwise payable under this Law" shall mean the amount of tax payable

on income derived by a taxpayer from sources outside the People#39;s Republic

of China, computed separately for each different country or region and for

each different income category, in accordance with the standards for the

deduction of expenses and the applicable tax rates stipulated in the Tax

Law. The sum of the amounts of tax payable in the different income

categories

deductions for that country or region.

If the actual amount of inpidual income tax paid by a taxpayer in a

country or region outside the People#39;s Republic of China is less than the

limit for deductions for that country or region computed in accordance

with the provisions of the preceding paragraph, the balance shall be paid

in the People#39;s Republic of China. If the amount exceeds the limit for

deductions for that country or areas, the excess portion may not be

deducted from the amount of tax payable for that Tax Year; however, such

excess portion may be deducted from any unused portion of the limit for

deductions for that country or region during subsequent Tax Years, for a

maximum period of five years.

Article 33

When taxpayers apply for approval to deduct the amounts of inpidual

income tax paid outside the People#39;s Republic of China in accordance with

Article 7 of the Tax Law, they shall provide the original tax payment

receipts issued by the tax authorities outside the People#39;s Republic of

China.

Article 34

When withholding agents make taxable payments to inpiduals, they

shall withhold tax in accordance with the Tax Law, pay the tax over to the

treasury in a timely manner, and keep special records for future

inspection.

For the purposes of the preceding paragraph, the term "payments"

shall include payments in cash, payments by remittance, payments by

account transfer, and payments in the form of negotiable securities,

physical objects and other forms.

Article 35

Taxpayers who personally file tax returns shall file the returns with

and pay tax to the tax authorities-in-charge of the place where their

income is derived. Taxpayers who derive income from sources outside the

People#39;s Republic of China, or who derive income in two or more places

inside the People#39;s Republic of China, may select one place in which to

file tax returns and pay tax. Taxpayers who wish to change the location in

which they file tax returns and pay tax shall obtain the approval of the

original tax authorities-in-charge.

Article 36

When taxpayers who personally file tax returns file their returns,

tax payments that have been withheld inside the People#39;s Republic of China

may be deducted from the amount of tax payable, in accordance with

relevant regulations.

Article 37

Taxpayers who concurrently derive income under two or more of the

categories listed in Article 2 of the Tax Law shall compute and pay tax

separately for each category. Taxpayers who derive income under items

(1), (2) or (3) of Article 2 of the Tax Law in two or more places inside

the People#39;s Republic of China shall combine the income under the same

category for the computation and payment of tax.

Article 38

For the purposes of the second paragraph of Article 9 of the Tax Law,

the term "specified industries" shall mean the excavation industry,

ocean-shipping industry, deepsea fishing industry and other industries as

determined by the Ministry of Finance.

Article 39

For the purposes of the second paragraph of Article 9 of the Tax Law,

the term "tax computed on an annual basis and paid in advance in monthly

installments" shall mean the monthly prepayment of the tax payable on the

income from wages and salaries of staff and workers in the specified

industries listed in Article 38 hereof, and the computation of the actual

tax payment due, within 30 days from the last day of the year, by

averaging over 12 months the total wages and salary income for the whole

year, at which time excess payments shall be refunded and deficiencies

shall be made good.

Article 40

For the purposes of the fourth paragraph of Article 9 of the Tax Law,

the phrase "the tax shall be paid into the state treasury within 30 days

after the end of each tax year" shall mean that taxpayers who derive their

income from contracted or leased operation of enterprises in a lump sum

payment at the end of the year, shall pay the tax payable thereon into the

State treasury within 30 days of the date on which the income is derived.

Article 41

In accordance with Article 10 of the Tax Law, foreign currency income

shall be converted into Renminbi for the computation of the amount of

taxable income at the exchange rate published by the People#39;s Bank of

China on the last day of the month preceding that in which the tax payment

receipt is issued. At the time of the annual settlement after the end of

the year in accordance with the Tax Law, the amounts of foreign currency

income on which tax has been prepaid on a monthly basis or each time the

income was derived shall not be converted again. As for the portion of

income the tax on which is to be made up, the amount of taxable income

shall be computed by converting such portion of income into Renminbi

according to the exchange rate published by the People#39;s Bank of China on

the last day of the preceding Tax Year.

Article 42

When tax authorities pay commissions to withholding agents in

accordance with Article 11 of the Tax Law, they shall issue to the

withholding agents monthly refund certificate, on the strength of which

the withholding agent shall carry out treasury refund procedures with

designated banks.

Article 43

The models for inpidual income tax returns, inpidual income tax

withholding returns and inpidual income tax payment receipts shall be

formulated by the State Administration of Taxation in a unified manner.

Article 44

For the purposes of the Tax Law and these Regulations, the term "Tax

Year" shall mean the period commencing on January 1 and ending on December

31 on the Gregorian calendar.

Article 45

Commencing with the 1994 Tax Year, inpidual income tax shall be

computed, levied and collected in accordance with the Tax Law and these

Regulations.

Article 46

These Regulations shall be interpreted by the Ministry of Finance and

the State Administration of Taxation.

Article 47

These Regulations shall be implemented as from the date of

promulgation. The Provisional Regulations of the State Council of the

People#39;s Republic of China Concerning the Reduction of Inpidual Income

Tax on the Income From Wages and Salaries Derived by Foreign Personnel

Working in China promulgated by the State Council on August 8, 1987 shall

be repealed at the same time./