Directions for Levying Business Tax on Goods Auctioned or Sold by Courts or Customs
In case of any discrepancy between the English version and the Chinese text of this Act, the Chinese text shall govern.
Promulgated on April 1, 1986 per MOF Decree No. 7522284.
Amendment promulgated on November 1, 1995 per MOF Decree No. 841656997.
Amendment promulgated on June 17, 1999 per MOF Decree No. 881919877.
1.The Directions herein are set forth for the purpose of enhancing communication between government agencies and handling with regard to the levy of business tax on goods auctioned or sold by the courts or the Customs.
2.Courts and the Customs are exempted from business registration pursuant to Article 29 of the Value-Added and Non-Value-Added Business Tax Act (hereunder referred to as the "Act"), and are not required to issue a uniform invoice for goods auctioned or sold by them pursuant to Subparagraph 21, Article 4 of the Regulations Governing the Use of Uniform Invoices.
3.Goods auctioned or sold by a court or the Customs are exempted from business tax if they meet any of the following conditions:
(1).The goods auctioned or sold are those to which zero rating as provided in Article 7 of the Act (Subparagraph 4 and Subparagraph 6) or tax exemption as provided in Article 8 of the Act (Subparagraph 1, Subparagraph 19, Subparagraph 21, Subparagraphs 25 ~ 28, and Subparagraph 30, Paragraph 1) apply.
(2).The goods auctioned or sold are those of a non-business entity or fixed assets of a business entity to which special tax computation applies under Section 2, Chapter 4 of the Act.
4.Business tax on taxable goods auctioned or sold by a court or the Customs shall be computed by the following formula: Business tax = auction or transaction price ÷ (1 + applicable tax rate 5%) x applicable tax rate 5%
5.Prior to auctioning or selling the goods, a court should notify the local business tax authority. Upon receiving such notice from the court, the tax authority should find out as soon as possible whether the goods are subject to business tax. For taxable goods, the tax authority should file a statement with the court claiming the right to receive a portion of the proceeds from the auction or sale one day before the court concludes the auction or sale, or delivers the goods to the creditor(s).
6.The statement filed by the tax authority with the court as mentioned in the preceding paragraph should be in the form of an official document and indicate that the amount claimed is business tax due computed by the formula in Point 4 herein based on the auction or transaction price.
7.The Customs should, after the goods are auctioned or transacted, fill out a Statement of Goods Auctioned or Sold in quadruplicate copies. The purposes of each copy of the list are as follows:
(1).The first copy is the bookkeeping copy to be given to the buyer as purchase receipt.
(2).The second copy is the tax deduction copy to be given to the buyer for deduction of input tax.
(3).The third copy is the notice copy to be sent to the local business tax authority before the 5th of the following month by the agency that auctioned or sold the goods.
(4).The fourth copy is to be kept by the agency that auctioned or sold the goods.
8.When auctioning or selling goods that are subject to business tax, the Customs should, after the buyer has made payment in full, calculate business tax due as soon as possible, prepare the tax memo, and deposit the business tax with a designated bank.
9.After receiving the third copy of the Statement of Goods Auctioned or Sold (the notice copy) from the Customs, the tax authority should, within three days, send the copy to its data processing department where buyer's data will be filed and processed for the purpose of circulation.
The Directions herein are in force on November 1, 1995.
The Directions for Levying Business Tax on Goods Auctioned or Sold by Court, Customs and Other Agencies issued by MOF on April 1, 1986 by decree No. 7522284 cease to be applicable from November 1, 1995.