During the month of June 2019, Company C, a motor vehicle manufacturing company, carried out the...

  

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During the month of June 2019, Company C, a motor vehicle manufacturing company, carried out the following transactions: (1) Imported engines for production purposes for the equivalent of RMB 2,000,000 (value approved by customs). (2) Purchased raw materials for RMB 800,000 (excluding VAT). (3) Sold 200 of Model A motor vehicles at RMB 150,000 each (excluding VAT). (4) Sold ten Model A motor vehicles to its own staff at their cost of RMB95,000 (excluding VAT) each. (5) Company C is testing the performance of a new design of motor vehicle (Model B). Five Model B motor vehicles were taken for self-use. The cost per unit of Model B motor vehicles is RMB 130,000 (excluding VAT); no market price has yet been set for these vehicles. Required: Calculate consumption tax and value added tax (VAT) payable by Company C in the month of June 2019. Note: you should assume that: (1) The tariff for all kinds of imported goods is 25%. (2) The deemed profit rate for the Model B motor vehicles is 8%. (3) The consumption tax rate for the Model B motor vehicles is 9% Tax Items Table of taxable goods and tax rates Tax Unit I. Tobacco 1. Cigarettes (1) Grade A Cigarettes (2) Grade B Cigarettes For wholesale 2. Cigars 3. Cut Tobacco II. Liquor 1. White spirits 2. Yellow spirits 3. Beer (1) Grade A beer (2) Grade B beer 4. Other alcoholic drinks III. Cosmetics IV. Expensive ornaments, pearls, jewelry and precious jade 1. Gold and silver jewelry, platinum jewelry and diamond and diamond decorations 2. Other jewelry, pearls, precious jade and stones V. Firecrackers and Fireworks VI. Petroleum products 1. Petrol 2. Diesel 3.Aviation oil 4.Naphtha 5.Solvent oil 6.Lubricant oil 7. Fuel VII. Motorcycles 1. Cylinder capacity of 250 ml 2. Cylinder capacity of above 250 ml VIII. Motor Cars 1.Passenger vehicle (1) 1.0 litres or below (2) above 1.0 litres to 1.5 litres (3) above 1.5 litres to 2.0 litres (4) above 2.0 litres to 2.5 litres (5) above 2.5 litres to 3.0 litres (6) above 3.0 litres to 4.0 litres (7) above 4.0 litres 2. Medium-sized and Light Commercial Buses IX. Golf Balls and golf instruments X. Luxury watches XI. Yachts XII. Disposable Chopsticks XIII. Hardwood flooring XIV. Batteries XV. Coatings Wooden 50,000 Cigarettes RMB 70 or higher for 200 36% cigarettes 56% Less than RMB 70 or for 200 RMB 250 11% 36% 30% cigarettes 50,000 Cigarettes 500 grams Tonnage Priced RMB 3,000 per ton or higher Priced less than RMB 3,000 per ton Litre Litre Litre Litre Litre Litre Litre The rate is determined according to cylinder capacity Tax Rate/Amount RMB 10,000 or higher each RMB 150 RMB0.5 plus 20% RMB240 RMB250 RMB220 10% 15% 5% 10% 15% RMB1.52 RMB1.20 RMB1.20 RMB1.52 RMB1.52 RMB1.52 RMB1.20 3% 10% 1% 3% 5% 9% 12% 25% 40% 5% 10% 20% 10% 5% 5% 4% 4% TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Income tax for resident enterprises and non-resident enterprises with an establishment in China Income tax for specific China sourced income of non-resident enterprises Employment welfare expenses Labour union expenses Employee training expenses Donations Entertainment expenses Advertising and promotion expenses Commission * Except for certain industries with no deduction Deduction limits on certain expenses 14% of total wages 2% of total wages 8% of total wages 12% of the accounting profits 60% of the amount subject to a maximum of 0.5% of sales/business income of the year 15% of the sales/business income of the year* 5% of the specific sales/business income 1234567 Rate 25% 10% Individual income tax Comprehensive income - annual basis and cumulative withholding basis of wages and salaries for a tax resident Level Annual allowance can be deducted. Taxable income (annual) (RMB) 3 10 Up to and including 36,000 Over 36,000 to 144,000 Over 144,000 to 300,000 Over 300,000 to 420,000 Over 420,000 to 660,000 20 25 30 Over 660,000 to 960,000 35 85,920 Over 960,000 45 181,920 RMB60,000, specific deductions and specific additional deductions Rate Quick deduction factor % (RMB) 0 2,520 16,920 31,920 52,920 During the month of June 2019, Company C, a motor vehicle manufacturing company, carried out the following transactions: (1) Imported engines for production purposes for the equivalent of RMB 2,000,000 (value approved by customs). (2) Purchased raw materials for RMB 800,000 (excluding VAT). (3) Sold 200 of Model A motor vehicles at RMB 150,000 each (excluding VAT). (4) Sold ten Model A motor vehicles to its own staff at their cost of RMB95,000 (excluding VAT) each. (5) Company C is testing the performance of a new design of motor vehicle (Model B). Five Model B motor vehicles were taken for self-use. The cost per unit of Model B motor vehicles is RMB 130,000 (excluding VAT); no market price has yet been set for these vehicles. Required: Calculate consumption tax and value added tax (VAT) payable by Company C in the month of June 2019. Note: you should assume that: (1) The tariff for all kinds of imported goods is 25%. (2) The deemed profit rate for the Model B motor vehicles is 8%. (3) The consumption tax rate for the Model B motor vehicles is 9% Tax Items Table of taxable goods and tax rates Tax Unit I. Tobacco 1. Cigarettes (1) Grade A Cigarettes (2) Grade B Cigarettes For wholesale 2. Cigars 3. Cut Tobacco II. Liquor 1. White spirits 2. Yellow spirits 3. Beer (1) Grade A beer (2) Grade B beer 4. Other alcoholic drinks III. Cosmetics IV. Expensive ornaments, pearls, jewelry and precious jade 1. Gold and silver jewelry, platinum jewelry and diamond and diamond decorations 2. Other jewelry, pearls, precious jade and stones V. Firecrackers and Fireworks VI. Petroleum products 1. Petrol 2. Diesel 3.Aviation oil 4.Naphtha 5.Solvent oil 6.Lubricant oil 7. Fuel VII. Motorcycles 1. Cylinder capacity of 250 ml 2. Cylinder capacity of above 250 ml VIII. Motor Cars 1.Passenger vehicle (1) 1.0 litres or below (2) above 1.0 litres to 1.5 litres (3) above 1.5 litres to 2.0 litres (4) above 2.0 litres to 2.5 litres (5) above 2.5 litres to 3.0 litres (6) above 3.0 litres to 4.0 litres (7) above 4.0 litres 2. Medium-sized and Light Commercial Buses IX. Golf Balls and golf instruments X. Luxury watches XI. Yachts XII. Disposable Chopsticks XIII. Hardwood flooring XIV. Batteries XV. Coatings Wooden 50,000 Cigarettes RMB 70 or higher for 200 36% cigarettes 56% Less than RMB 70 or for 200 RMB 250 11% 36% 30% cigarettes 50,000 Cigarettes 500 grams Tonnage Priced RMB 3,000 per ton or higher Priced less than RMB 3,000 per ton Litre Litre Litre Litre Litre Litre Litre The rate is determined according to cylinder capacity Tax Rate/Amount RMB 10,000 or higher each RMB 150 RMB0.5 plus 20% RMB240 RMB250 RMB220 10% 15% 5% 10% 15% RMB1.52 RMB1.20 RMB1.20 RMB1.52 RMB1.52 RMB1.52 RMB1.20 3% 10% 1% 3% 5% 9% 12% 25% 40% 5% 10% 20% 10% 5% 5% 4% 4% TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Income tax for resident enterprises and non-resident enterprises with an establishment in China Income tax for specific China sourced income of non-resident enterprises Employment welfare expenses Labour union expenses Employee training expenses Donations Entertainment expenses Advertising and promotion expenses Commission * Except for certain industries with no deduction Deduction limits on certain expenses 14% of total wages 2% of total wages 8% of total wages 12% of the accounting profits 60% of the amount subject to a maximum of 0.5% of sales/business income of the year 15% of the sales/business income of the year* 5% of the specific sales/business income 1234567 Rate 25% 10% Individual income tax Comprehensive income - annual basis and cumulative withholding basis of wages and salaries for a tax resident Level Annual allowance can be deducted. Taxable income (annual) (RMB) 3 10 Up to and including 36,000 Over 36,000 to 144,000 Over 144,000 to 300,000 Over 300,000 to 420,000 Over 420,000 to 660,000 20 25 30 Over 660,000 to 960,000 35 85,920 Over 960,000 45 181,920 RMB60,000, specific deductions and specific additional deductions Rate Quick deduction factor % (RMB) 0 2,520 16,920 31,920 52,920

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Consumption Tax and Value Added Tax VAT Payable by Company C in the month of June 2019 Consumption T... View the full answer