Announcement on Matters including the Method for Determining the Basis for Urban Maintenance and Construction Tax
Announcement [2021] No.28 of the Ministry of Finance and the State Taxation Administration
The Law of the People's Republic of China on Urban Maintenance and Construction Tax, adopted at the 21st Session of the Standing Committee of the 13th National People's Congress on August 11, 2020, shall come into force as of September 1, 2021. Upon approval of the State Council, matters including the method for the determination of the basis for urban maintenance and construction tax are hereby announced as follows:
I. The calculation of urban maintenance and construction tax shall be based on the amounts of value-added tax ("VAT") and consumption tax (hereinafter referred to as the "Two taxes") actually paid by taxpayers according to law.
The amount of the "Two Taxes" actually paid in accordance with the law refers to the amount of the Two Taxes (excluding the Two Taxes paid due to import of goods or sale of labor services, services and intangible assets within the territory by overseas entities and individuals) that shall be paid by a taxpayer as calculated in accordance with the relevant laws and regulations and tax policies on the Two Taxes, plus the amount of VAT credits, after deducting the amount of the Two Taxes directly exempted or reduced and the amount of refunds of VAT credit at the end of the period.
The amount of the Two Taxes directly exempted or reduced refer to the amount of the Two Taxes directly reduced or exempted in accordance with the relevant laws and regulations and tax policies on the Two Taxes, excluding the amount of the Two Taxes refunded under the methods of "return after collection", "refund after collection" and "refund upon collection".
II. The basis for calculation and collection of education surcharge and local education surcharge shall be the same as that for calculation of urban maintenance and construction tax and shall be subject to Article I hereof.
This Announcement shall come into force as of September 1, 2021.
Ministry of Finance
State Taxation Administration
August 24, 2021
