According to Appendix 2 of Caishui [20 1 6] No.36 Notice of the Ministry of Finance in State Taxation Administration of The People's Republic of China on Comprehensively Promoting the Pilot Project of Changing Business Tax to Value-added Tax, (1) general taxpayers can choose to apply the simple tax calculation method to the construction services provided by the contractor. Providing construction services in the form of contractor refers to the construction services that the construction party collects labor, management fees or other expenses without purchasing the materials needed for the construction project or only purchasing auxiliary materials.

(2) General taxpayers can choose to apply the simple tax calculation method to the construction services provided by Party A for this project. A-supplied project refers to a construction project in which all or part of the equipment, materials and power are purchased by the project contractor.

(3) General taxpayers can choose to apply the simple tax calculation method to the construction services provided by old construction projects.

Old construction projects refer to: (1) construction projects with the contract commencement date indicated in the construction permit before April 30th, 20th16th; (2) Construction projects with the commencement date indicated in the construction project contract before April 30th, 20 16 without obtaining the building construction permits.