Goods deemed to be sold can be determined according to the following three methods to calculate the value-added tax: (1) according to the average selling price of similar goods in the recent period of taxpayers; (two) according to the average selling price of similar goods of other taxpayers in the recent period; (three) according to the composition of taxable value. The formula of taxable value is: composition taxable value = cost ×( 1+ cost profit rate).

According to the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value-added Tax

Article 16 If a taxpayer has the obvious low price as mentioned in Article 7 of the Regulations without justifiable reasons or has the behavior of treating goods as sales as listed in Article 4 of these Detailed Rules without sales, the sales amount shall be determined in the following order:

(a) according to the taxpayer's average selling price of similar goods in the recent period;

(two) according to the average selling price of similar goods of other taxpayers in the recent period;

(three) according to the composition of taxable value. The formula of taxable value is:

Composition taxable value = cost ×( 1+ cost profit rate)

For goods subject to consumption tax, consumption tax shall be added to the taxable value.

The cost in the formula refers to the actual production cost for selling self-produced goods and the actual purchase cost for selling purchased goods. The cost profit rate in the formula is determined by State Taxation Administration of The People's Republic of China.