Article　 12 Interests　 derived from State treasury bonds issued by　the　 State　 mentioned　in　Paragraph 2 of Article 4 of the Tax Law mean　income derived by individuals　from　interests　of the State treasury　bonds issued by　the　Ministry　of Finance of the People's Republic　of　China; interests derived from financial bonds issued by the　State　mean income　derived　 by　individuals　 from　interests　of financial bonds issued upon approval of the State Council.

Article  13 Subsidies and allowances issued in an unified manner by　the State mentioned　in Paragraph 3 of Article 4 of the Tax　Law mean　the special　governmental　allowances following the stipulations of　the　State　 Council and the subsidies and allowances exempt from individual income tax stipulated by the State Council. 　　

Article  14  Welfare　funds mentioned in Paragraph 4 of Article 4 of　the Tax Law  mean　welfare　funds　drawn out in accordance with the　relevant State stipulations from　enterprises, institutions, State　organs and social organizations or　the　living　subsidies paid to individuals from　funds of　trade　unions;　relief　funds mean the subsidies paid to individuals　for　tiding　over living difficulties by　the　State　civil affairs department. 　　　

Article  15 "Income of diplomatic representatives, consulate officials and other　people　of　foreign　embassies　and consulates　in　China　who enjoy tax concessions according　to relevant　laws　 of　China mentioned　 in　Paragraph　 8　of　Article　4 of　the　Tax　Law means their income　exempt　 from　tax　in　accordance with　　the　 Regulations　of　the　People's　 Republic　 of　 China　on Diplomatic　 Privileges　 and　Immunities　and　 the　　Regulations　 of the People's Republic of China on Consular Privileges and Immunities. 　　

Article  16 The scope and period　for　reduction of and exemption　from individual income tax　mentioned　in　Article 5 of the Tax Law shall be formulated by　the provincial,　autonomous regional　and municipal people's governments. 　　

Article　 17　Costs and expenses mentioned in Paragraph 2 of Section 1　of　Article　 6　of　the　Tax　Law　mean　various direct expenditures by　taxpayers on production and business　operations,　the　part of indirect expenses　 listed in costs, sales expense, management　expense　　 and financial expense; the losses mean various　non-business extra expenses by taxpayers during the production and business operations process. When taxable income of taxpayers　engaged　in　 production and　business operations cannot be correctly computed　due to lack　 of　complete　 and　accurate data　provided　by　the taxpayers, the income shall　be　ratified and decided by the tax authorities. 　

Article　18　The taxable amount of income in a tax year　mentioned　in Paragraph 3 of　　Section 1 of　Article　6　of　the　 Tax　Law means　income　 derived　by　taxpayers from contracted profits and other incomes of　wage and salary nature　due　to　 contracting　 or　 leasing operations;　deduction　the necessary expenses means deduction of RMB800 each month. 　　

Article　 19　 The　original　value　of　the　Property　mentioned in Paragraph 5 of Section 1 of Article 6 of the Tax Law means: 　

    (1)　Securities:　the　purchasing　price and the expenses paid at the time of purchase in accordance with the stipulations; 　　

(2)  Buildings: construction fees or purchasing　price　and other relevant expenses; 　

(3)　Land　use　rights:　the　fund　paid　for obtaining the land　use rights,　expenses　for　development　of　the　land　and　other　relevant  expenses; 　　

(4)　Machinery　and　equipment,　motor vehicles and ships: the purchasing price, fees for

transportation and installation and other relevant expenses; and 　　

(5)　Other property: determined with reference to the methods above. When the original value of　

the property cannot be correctly computed　due to lack of complete and accurate　certificates

provided by　the　taxpayers, the tax authorities shall ratify and decide the original value of　

the property. 　

Article　20 Reasonable expenses mentioned in Paragraph 5 of Section 1 of Article 6 of　the Tax Law mean the relevant expenses paid at the time of selling in accordance with the stipulations. 　

Article　 21　Income of a single payment mentioned in Paragraph 4 and 6 of Section 1 of Article 6 of the Tax Law means: 　　

(1)  Income derived from labor services:　the remuneration of each payment is counted　as a single payment when it is obtained; successive payments within a month under the same item of income may　be aggregated　and counted as a single payment; 　　

(2)　Remuneration derived from writing: remuneration obtained at each publication is counted as a single payment; 　　

(3)　Income derived from royalties: remuneration derived from　providing and assigning　the　rights　of one item each time is counted as a single payment; 　　　

(4)　Income derived from leasing of property: remuneration received within a month is counted as

a single payment; 　　

(5)       Income derived from interests, dividends and extra　dividends: remuneration obtained at　

each payment of interests, dividends and extra dividends is counted as a single payment; and 　　

(6)　Chance　income:　such　income　obtained each time is counted as a single payment. 　　

Article  22 Income　 from　transfer　of　property　is　taxed　in accordance　with　 the　　balance of income  from　a　transfer　of property　minus　 the　original value of the property and the reasonable expenses.