According to Article 16 of the Detailed Rules for the Implementation of VAT

1, "the price approved by the tax bureau is low" means that the sales price of the goods approved by the tax authorities is obviously lower than the sales price of similar goods. The value-added tax regulations stipulate that "if the price of goods or taxable services sold by taxpayers is obviously low without justifiable reasons, the sales amount shall be verified by the competent tax authorities." Where a taxpayer implements the obviously low price mentioned in Article 7 of the Regulations without justifiable reasons, or treats the goods listed in Article 4 of these Rules as sales without selling them, the sales amount shall be determined in the following order:

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

(2) According to the recent average selling price of similar goods by other taxpayers;

(3) According to the composition of taxable value. The calculation formula of taxable value is:

Taxable value of components = cost ×( 1+ cost profit rate)