ined by the competent tax authorities.
Article 8
     For taxpayers who purchase goods or receive taxable services (hereinafter referred to as ¡äpurchasing goods or taxable  services¡ä),  VAT paid or borne shall be the input tax.
     The amount of input tax that can be credited against the output  tax,other than the situations specified in Paragraph 3 of this Article,  shall be restricted to the amount of VAT payable as indicated on  the  following
VAT credit document:
     (1) VAT indicated in the  special  VAT  invoices  obtained  from  the sellers;
     (2) VAT indicated on the  tax  payment  receipts  obtained  from  the customs office.  The creditable input tax for the purchasing of tax exempt agricultural products is calculated based on a deemed  deduction  rate  at 10% on the actual purchasing price. The formula for calculating the  input tax is as follows:
       Input tax = Purchasing price x Deduction rate
Article 9
     Where  taxpayers  purchasing  goods  or  taxable  services  have  not obtained  and  kept  the  VAT  credit  document  in  accordance  with  the regulations, or the VAT payable and other  relevant  items  in  accordance with the regulations are not indicated on  the  VAT  credit  document,  no input tax shall be credited against the output tax.

Article 10
     Input tax on the following items shall not be credited against
     the output tax:
     (1) Fixed assets purchased;
     (2) Goods purchased or taxable services used for non-taxable items;
     (3) Goods purchased or taxable services used for tax exempt items;
     (4) Goods purchased or taxable services used  for  group  welfare  or personal consumption;
     (5) Abnormal losses of Goods purchased;
     (6) Goods purchased or taxable services consumed in the production of work-in-progress or finished goods which suffer abnormal losses.
Article 11
     Small-scale taxpayers engaged in selling goods  or  taxable  services shall use a simplified method for calculating the tax payable.
     The criteria for small-scale taxpayers  shall  be  regulated  by  the
Ministry of Finance.
Article 12
     The rate leviable on  the  small-scale  taxpayers  selling  goods  or taxable services shall be 6%.
     Any adjustment to the leviable rate shall be determined by the  State Council.
Article 13
     For small-scale taxpayers selling goods or taxable services, the  tax payable shall be calculated based on the sales  amount  and  the  leviable rate prescribed in Article 12 of these Regulations. No input tax shall  be creditable. The formula for calculating the tax payable is as follows:
     Tax payable = Sales amount x leviable rate
      The  sales  amount  shall  be  determined  in  accordance  with  the stipulations of Article 6 and Article 7 of these Regulations.
Article 14
     Small-scale taxpayers with sound accounting who can provide  accurate taxation  information  may,  upon  the  approval  of  the  competent   tax authorities, not be treated as  small-scale  taxpayers,  The  tax  payable shall  be  computed  pursuant  to  the  relevant  stipulations  of   these Regulations.
Article 15
     For taxpayers importing goods, tax payable shall be computed based on the composite assessable price and the tax rates prescribed in  Article  2 of these Regulations. No tax will be credited. The formulas for  computing the composite assessable price and the tax payable are as follows:
     Composite assessable price
    =Customs dutiable value + Customs Duty + Consumption Tax
     Tax payable = Composite assessable price x Tax rate

Article 16
     The following items shall be exempt from VAT:
      (1)  Self-produced  agricultural  products  sold   by