Article 7 Where the prices for provision of taxable services, transfer of intangible assets or sale of real estates by a taxpayer are obviously lower without due reasons, its turnover shall be verified by the tax authority.

Article 8 The following items shall be exempt from business tax:

(1) Nursing services provided by nurseries, kindergartens, rest homes and welfare institutions for the handicapped, matchmaking and funeral services;

(2) Services provided by disabled individuals;

(3) Medical services provided by hospitals, clinics and other medical institutions;

(4) Educational services provided by schools and other educational institutions; and services provided by students participating in work-study programs;

(5) Agricultural mechanical plough, irrigation and drainage, prevention and treatment of plant diseases and insect pests, plant protection, insurance for farming and husbandry, and related technical training services; breeding and the prevention and treatment of diseases of poultry, livestock and aquatic animals;

(6) Admission incomes for cultural activities held by memorial halls, museums, cultural centers, administrative institutions for sites protected for historical and cultural value, art galleries, exhibition halls, academies of painting and calligraphy and libraries; and admission incomes for cultural and religious activities held at places of religious worship; and

(7) Insurance products provided for export goods by domestic insurance organizations of China.

Except as stipulated above, exemption and reduction items of business tax shall be prescribed by the State Council. Local governments or departments may not specify any tax exemption or reduction items.

Article 9 Where a taxpayer is concurrently engaged in items with tax exemption or reduction, the turnover of the items with tax exemption or reduction shall be accounted separately; and if the turnover has not been accounted separately, no tax exemption or reduction is allowed.

Article 10 For the taxpayers whose turnovers have not reached the threshold of business tax stipulated by the competent financial and tax authorities under the State Council, the business tax shall be exempt, and otherwise, the business tax shall be fully computed and paid according to the provisions of the Regulations.

Article 11 Withholding agents for business tax:

(1) Where the units or individuals outside of the People's Republic of China provide taxable services, transfer intangible assets or sell real estates in the territory of China and have not established business institutions, their agents in China shall be the withholding persons; and where any of such units or individuals has no agent in China, the transferee or the purchaser shall be withholding person.

(2) Other withholding agents as provided for by the competent financial and tax departments under the State Council.

Article 12 The time when the obligation of the payment of business tax arises shall be the date on which the taxpayer provides taxable services, transfers intangible assets or sells real estates and receives the business incomes or obtains the certificates for collecting business incomes, unless otherwise specified by the competent financial and tax departments under the State Council.

The time when the obligation of the withholding of business tax arises shall be the date on which the obligation of the payment of business tax of the taxpayer arises.

Article 13 Business tax shall be collected by the administrations of taxation.

Article 14 The places for payment of business tax are as follows:

(1) A taxpayer providing taxable services shall report and pay the tax to the local administration of taxation of the place where its/his organization is located or domiciled. However, a taxpayer providing construction services as well as other taxable services provided for by the competent financial and tax departments under the State Council shall report and pay tax to the local administration of taxation of the place where the taxable services are provided;

(2) A taxpayer transferring intangible assets shall report and pay tax to the local administration of taxation of the place where its/his organization is located or domiciled. However, if a taxpayer transfers or leases the land use right, it/he shall report and pay tax to the local administration of taxation of the place where the land is located; and

(3) A taxpayer selling or renting real estates shall report and pay tax to the local administration of taxation of the place where the real estates are located.