There are three methods that can utilised to calculate a taxpayers Consumption Tax amount; the ad valorem method, the specific tax method and the composite method.

The formula under the ad valorem method is:

tax = sales revenue x proportional tax rate

The formula under the specific tax method is: 

Tax = Quantity of Sales x Specific Tax

The formula under the composite tax method is: 

Tax = (sales revenue x proportional rate of tax) + (quantity of sales x specific tax)

Taxable Value

Sales revenue is the selling price and any extra fees charged by the taxpayer to the purchaser. Where there are no sales revenue (such as where the taxpayer has produced the goods for its own use) or in the case where it has commission the processing of the goods for a service fee, the taxable value shall be the price of “identical consumption goods” (Articles 7 and 8 of the Interim Regulation). Where this is not available the Regulation sets out a detailed formula to determine the taxable value.