1. Customs duty

・A national tax levied by customs on goods and articles entering or leaving the customs territory. ・The import tariff code is “A”. ・Export tariff code is “C”.

2. Value Added Tax (VAT)

・VAT is a turnover tax that is levied on the new prices created in the production, distribution, and service of goods. ・VAT at the import stage is collected by the Customs, while VAT at other stages is collected by the tax authorities. ・Customs collects VAT on imported goods in accordance with the Provisional Regulations of the People's Republic of China on Value-Added Tax. ・The code for import VAT is “L”.

3. Consumption Tax

・Consumption tax is a tax on the turnover of consumer goods or consumption behavior.

4. Duty-paid price

・The duty-paid price of imported goods shall be determined by the Customs on the basis of the transaction price of the goods, and shall include the transportation and related expenses and insurance premiums before the goods arrive at the place of importation and unloading in the People's Republic of China. ・The duty-paid price of exported goods shall be determined by the Customs on the basis of the transaction price of the goods, and shall include transportation and its related costs and insurance before the goods are loaded and unloaded at the place of export in the People's Republic of China.

5. Transaction price

・Transaction price of imported goods refers to the total price paid and payable by the buyer to the seller for the importation of the goods when the seller sells the goods to the People's Republic of China, and the total price adjusted in accordance with the “Customs Measures for Validation of Duty-Paid Prices of Imported and Exported Goods”, including the price paid directly and the price paid indirectly. ・The transaction price of the exported goods means the total amount of the price that the seller should collect directly and indirectly from the buyer for the goods at the time of the sale of the goods.