China Clarifies Consumption Tax Rates for Mixed Liquors

China’s State Administration of Taxation (SAT) issued the “Announcement on Applicable Consumption Tax Rates for Mixed Liquors (SAT Announcement [2011] No.53)” on September 28, clarifying the consumption tax rates for different types of mixed liquors. The Announcement defines mixed liquors as processed alcoholic beverages that use fermented liquor, distilled liquor or edible ethanol as their liquor base and have edible food additives added to change the original style of the liquor base.

Mixed liquors with distilled liquor or edible ethanol as their liquor base are subject to the consumption tax rate of 10 percent if they also meet the following conditions:

• Boasting state licenses (guoshijianzi or weishijianzi) issued by the State Food and Drug Administration or the Ministry of Health
• Containing alcohol percentage (%) by volume of no more than 38 percent

Mixed liquors that use fermented liquor as their liquor base and contain alcohol percentages by volume of no more than 20 percent are subject to the consumption tax rate of 10 percent.

Other types of mixed liquors are subject to the consumption tax rate of 20 percent, plus a tax of RMB5 for every 500 grams/milliliters.

The Announcement also specified the aforementioned distilled, edible ethanol or fermented liquor bases are ones that comprise no less than 80 percent of distilled liquor, edible ethanol or fermented liquor.

The Announcement took effect on October 1, 2011.

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