Article 1 Entities and individuals engaged in the provision of services as prescribed in the Regulations, the transfer of intangible assets or the sale of real estates within the territory of the People's Republic of China shall be the taxpayers of business tax and shall pay business tax in accordance with the Regulations.

Article 2 The tax items and tax rates of business tax shall be subject to the Schedule of Items and Tax Rates of Business Tax attached to the Regulations.

Any adjustment to the tax items and tax rates shall be determined by the State Council.

The specific tax rates applicable to the taxpayers engaged in entertainment businesses shall be determined by the governments of provinces, autonomous regions and municipalities directly under the Central Government within the range prescribed by the Regulations.

Article 3 Where any taxpayer concurrently provides services with payment of business tax (hereinafter referred to as the payable services), transfers intangible assets or sells real estates under different tax items, the turnover, amount of transfer and sales (hereinafter referred to as the turnover) under different tax items shall be accounted separately; and if the turnovers have not been accounted separately, the higher tax rate shall apply.

Article 4 Where any taxpayer provides taxable services, transfers intangible assets or sells real estates, the tax payable shall be computed according to the turnover and the prescribed tax rates. The formula for computing the tax payable is as follows:

Tax payable = turnover tax rate

The turnover shall be computed in renminbi. Where the turnover of the taxpayer is settled in currencies other than renminbi, it shall be converted into renminbi for computation.

Article 5 The turnover of a taxpayer shall be the total price and all other expenses receivable from the provision of taxable services, transfer of intangible assets or sales of real estates by the taxpayer, except for the following circumstances:

(1) Where a taxpayer subcontracts its/his transport business to other entities or individuals, the turnover shall be the balance of the total price and other charges received less the transport charges paid to other entities or individuals;

(2) Where a taxpayer is engaged in tourism business, the turnover shall be the balance of the total price and other charges received less the payments of accommodation, meals, transport and admission tickets of scenic spots made by the tourists to other entities or individuals and the tourism charges to other sub-contracted tourism enterprises;

(3) Where a taxpayer subcontracts construction engineering to other entities, the turnover shall be the balance of the total price and other charges received less the payments to other entities;

(4) For the trading of foreign exchanges, marketable securities and futures, the turnover shall be the balance of the sale price less the purchase price; and

(5) Other circumstances as prescribed by the competent financial and tax departments under the State Council.

Article 6 A taxpayer shall deduct the amount of the relevant items in accordance with the provisions of Article 5 of the Regulations and if the vouchers thereof it/he obtained do not comply with laws, administrative regulations or the relevant provisions of the tax authorities under the State Council, the amount of those items shall not be deducted.