TAX: Consumption tax of 2 – 3 percent (varies according to provincial) applied on CIF. Also, there is a value added tax (VAT) of 17 percent for most items; necessities, such as agricultural products and utilities, are taxed at 13 percent. Small Businesses (annual production sales of less than RMB 1 million or annual wholesale or retail sales of less than RMB 1.8 million) are subject to VAT at the rate of 6 percent. VAT is applied on CIF + duty.