【Announcement No. 26 of 2021 of the State Administration of Taxation】

In order to implement the “Opinions on Further Deepening the Reform of Tax Collection and Administration” issued by the Central Office and the Office of the State Council, and to further standardize the collection and management of urban maintenance and construction tax (hereinafter referred to as the urban construction tax), in accordance with the Urban Maintenance and Construction Tax Law of the People’s Republic of China, the Ministry of Finance Tax The Announcement of the General Administration on Matters concerning the Determination of the Basis for Urban Maintenance and Construction Tax (No. 28 of 2021) and other relevant regulations, hereby announce the relevant matters as follows:

1. Urban construction tax is calculated based on the amount of value-added tax and consumption tax (hereinafter referred to as the two taxes) actually paid by the taxpayer in accordance with the law.
   The actual amount of value-added tax paid in accordance with the law refers to the amount of value-added tax that should be paid by the taxpayer in accordance with the relevant laws, regulations and tax policies of value-added tax, plus the amount of value-added tax exemption, deduction of direct deduction of value-added tax and end-of-period tax refund The amount after the refunded value-added tax (hereinafter referred to as the retained tax refund amount).
   The actual amount of consumption tax paid in accordance with the law refers to the amount of consumption tax that should be paid by taxpayers in accordance with relevant laws and regulations and tax policies on consumption tax, after deducting the amount of consumption tax that is directly deducted or exempted.
   The two taxes that should be paid do not include the two taxes paid for imported goods or overseas units and individuals selling labor services, services, and intangible assets in China.
   Taxpayers shall deduct from the tax calculation basis of urban construction tax in the next tax declaration period from the date of receiving the tax refund.
   The retained tax refund amount can only be deducted from the urban construction tax calculation basis determined in accordance with the general tax calculation method of value-added tax. The balance that has not been deducted in the current period will continue to be deducted in accordance with the regulations in the subsequent tax declaration period.
2. For small-scale value-added taxpayers to correct and check the tax calculation basis of urban construction tax previously determined in accordance with the general tax calculation method, it is allowed to deduct the remaining tax refund that has not been deducted.
3. For the urban construction tax levied on the value-added tax exemption amount, the taxpayer shall declare and pay the taxation authority in the next tax declaration period after the taxation authority approves the tax exemption amount. If the administrative division is changed, the urban construction tax rate corresponding to the new administrative division shall be applied from the month when the change is completed, and the taxpayer shall declare and pay at the new tax rate in the next tax declaration period of the month when the change is completed.
4. Taxpayers of urban construction tax apply different tax rates according to their location in urban areas, counties, towns and not in the above-mentioned areas. Urban areas, counties, and towns are determined in accordance with administrative divisions.
5. The time when the tax obligation of urban construction tax occurs is the same as the time when the tax obligation of the two taxes occurs, and they are paid at the same time as the two taxes. Simultaneous payment means that when the two taxes are paid, the corresponding urban construction tax should be paid at the same place and within the same payment deadline.
   If the two taxes are paid by entrusted collection, withholding and payment, collection and payment, prepayment, and supplementary payment, the city construction tax shall be paid at the same time.
   The withholding and payment in the preceding paragraph does not include the withholding and payment of value-added tax due to overseas units and individuals selling labor, services, and intangible assets in China.
6. The two tax refunds incurred by taxpayers overpaid, and the urban construction tax that has been paid will be refunded at the same time. Unless otherwise specified, the urban construction tax levied with the two taxes shall not be refunded unless the two taxes are levied first and then returned, first levied and refunded, and immediately refunded.
7. The collection and management of urban construction tax shall be handled in accordance with the relevant regulations of the two taxes.
8. This announcement will come into effect on September 1, 2021. The files and terms listed in the “List of Repealed Files and Terms” (attachment) shall be repealed at the same time.