Notice of State Taxation Administration of The People's Republic of China 1653 of the Ministry of Finance on Pushing Forward the Pilot Project of Changing Business Tax to VAT in an All-round Way (Caishui [2016] No.36): Appendix 2: Provisions on Relevant Matters Concerning the Pilot Project of Changing Business Tax to VAT;

(7) Construction services.

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 does not purchase the materials needed for the construction project or only purchases auxiliary materials, and collects labor costs, management fees or other expenses.

2. General taxpayers can choose to apply the simple tax calculation method for the construction services provided by Party A for the 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 contracting party.

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

Old construction projects refer to:

(1) the construction project with the contract commencement date indicated in building construction permits before April 30, 20 16;

(2) Construction projects with the commencement date indicated in the construction project contract before April 30th, 20 16 without obtaining the building construction permits.