According to the Law of the People's Republic of China on Resources Tax (Decree No.33 of the President of the People's Republic of China) and the Announcement of the Ministry of Finance and the State Administration of Taxation on the Implementation of Resource Taxes (Announcement No.34 of the Ministry of Finance and the State Administration of Taxation in 2020), if ad valorem taxation is implemented, the tax is based on the sales of taxable products;

Where specific taxation is implemented, the tax basis shall be the sales quantity of taxable products.

The sales quantity of taxable products includes the actual sales quantity of taxable products mined or produced by taxpayers and the quantity of taxable products for self-use in cases where resource tax should be paid.

The sales amount of taxable products shall be determined according to the total price charged by the taxpayer to the buyer for selling taxable products, excluding value-added tax.

The related transportation expenses included in the sales volume shall be deducted from the sales volume if VAT invoices or other legal and valid credentials are obtained.

Related transportation and miscellaneous expenses refer to the transportation expenses, construction funds, loading and unloading, warehousing and port miscellaneous expenses of taxable products from pithead or washing (processing) place to the station, wharf or the place designated by the buyer.