The issues of VAT collection and management, such as input tax deduction for domestic passenger transport services, are hereby announced as follows:
I. Input tax deduction for domestic passenger transport services
(1) The "domestic passenger transport service" as mentioned in Article 6 of the Announcement of the General Administration of Customs of the Ministry of Finance on Deepening the Reform of Value-added Tax (Announcement No.39 of the General Administration of Customs of the Ministry of Finance, 2019) is limited to employees who have signed labor contracts with their own units, and domestic passenger transport services that occur to employees who are dispatched by labor services accepted by their own units as employers.
(2) If a taxpayer purchases domestic passenger transport services with the tax amount indicated on the obtained VAT electronic ordinary invoice as the input tax amount, the buyer’s name, taxpayer identification number and other information indicated on the VAT electronic ordinary invoice shall be consistent with the taxpayer who actually deducts the tax, otherwise it will not be deducted.
(3) The input tax amount of domestic passenger transport services that taxpayers are allowed to deduct refers to the value-added tax amount actually incurred by taxpayers on or after April 1, 2019, and indicated in or calculated on the basis of legal and valid value-added tax deduction certificates. If the VAT special invoice or VAT electronic ordinary invoice is used as the VAT deduction voucher, it shall be the VAT special invoice or VAT electronic ordinary invoice issued on or after April 1, 2019.
Second, about the addition and deduction
(1) Announcement of the General Administration of Customs of the Ministry of Finance on Deepening the Reform of Value-added Tax (Announcement No.39 of the General Administration of Customs of the Ministry of Finance, 2019) Article 7 applies the so-called "sales" to the policy of adding and deducting, including sales declared by tax, sales checked and supplemented by tax, and sales adjusted by tax assessment. Among them, the sales amount of tax declaration includes the sales amount of general tax method, the sales amount of simple tax method, the sales amount of tax exemption, the sales amount of invoice issued by the tax authorities, and the export sales amount of exemption, credit and refund, that is, the sales amount of the project that is refunded immediately after collection.
Check, make up sales and tax assessment adjust sales, which are included in the check, make up or assess and adjust the current sales, and determine that the policy of adding and deducting is applicable; If the policy of collecting the difference in value-added tax is applicable, the policy of adding and deducting shall be determined based on the sales after the difference.
(2) For taxpayers established before March 31, 2019, and whose sales from April 2018 to March 2019 were all zero, the policy of adding and deducting shall be determined based on the sales for three consecutive months from the month when the sales were first generated.
Taxpayers established after April 1, 2019, and whose sales for three months from the date of establishment are zero, will be determined to apply the add-and-subtract policy based on the sales for three consecutive months from the month when sales are first generated.
(3) With the approval of the Ministry of Finance and the State Taxation Administration of The People’s Republic of China or its authorized financial and tax authorities, the head office and its branches that implement consolidated payment of value-added tax shall determine that the head office and its branches shall apply the policy of adding and deducting based on the total sales of the head office and its branches at the same level.
Three, about some advanced manufacturing value-added tax refund at the end of the period.
Since June 1, 2019, taxpayers who meet the requirements of the Announcement of the Ministry of Finance and the State Administration of Taxation on Defining the Tax Refund Policies for Some Advanced Manufacturing Industries at the End of VAT (Announcement No.84 of the Ministry of Finance and the State Administration of Taxation in 2019) should apply for the refund of incremental tax credits, and should handle the relevant tax refund business in accordance with the Announcement of State Taxation Administration of The People’s Republic of China on Handling Tax Refund for Tax Credits at the End of VAT (State Taxation Administration of The People’s Republic of China Announcement No.20 of 2019). The Application Form for Tax Refund (Refund) (State Taxation Administration of The People’s Republic of China Announcement No.20 of 2019) was revised and re-released (Annex 1).
Four, the application of tax exemption policy for small-scale taxpayers whose operating period is less than one tax period.
Since January 1, 2019, small-scale VAT taxpayers with a tax payment period of one quarter are exempted from VAT if the actual operating period of the current period is less than one quarter due to the establishment or cancellation in the middle of the quarter, and the current sales amount does not exceed 300,000 yuan. Item (3) of Article 6 of the Announcement of State Taxation Administration of The People’s Republic of China on Comprehensively Pushing Forward the Pilot Project of Changing Business Tax to Value-added Tax (State Taxation Administration of The People’s Republic of China Announcement No.23 in 2016 and State Taxation Administration of The People’s Republic of China Announcement No.31 in 2018) shall be abolished at the same time.
V. Small-scale taxpayers in the cargo transportation industry apply for issuing special VAT invoices on their behalf.
Value-added tax taxpayers who apply for issuing special VAT invoices on behalf of small-scale taxpayers in the cargo transportation industry (State Taxation Administration of The People’s Republic of China Announcement No.55 of 2017, revised and issued by State Taxation Administration of The People’s Republic of China Announcement No.31 of 2018) and small-scale cargo transportation enterprises with Internet logistics platform stipulated in Notice of State Taxation Administration of The People’s Republic of China on Launching Pilot Work of Issuing Special VAT Invoices on behalf of Internet Logistics Platform Enterprises (Tax General Letter [2017] No.579) issue special VAT invoices on their behalf and handle related tax-related matters.
Providing road freight transport services (except those engaged in ordinary road freight transport business with ordinary freight vehicles of 4.5 tons or less), and obtaining the People’s Republic of China (PRC) Road Transport Business License and the People’s Republic of China (PRC) Road Transport Certificate; To provide inland river cargo transport services, it has obtained the Domestic Waterway Transport Business License and the Ship Transport Business License.
Six, on the transport space contracting and space exchange business applicable tax items.
(1) In the transportation space contracting business, the contracting party shall take the total price and extra-price fees charged by it to the contractor as sales, and pay value-added tax according to "transportation services". The contractor shall take the total price and other expenses charged by it from the shipper as the sales amount and pay the value-added tax according to the "transportation service".
Transport space contracting business means that the contractor signs a transport service contract with the shipper as a carrier, collects the freight and assumes the responsibility of the carrier, and then entrusts the employer to actually complete the relevant transport services by contracting other people’s transport space.
(2) In the business of exchanging transport spaces, both parties who exchange transport spaces take the total price and extra-price expenses confirmed by their respective exchange of transport spaces as sales, and pay value-added tax according to "transportation services".
Transport space interchange business refers to the business activities in which taxpayers sign a transport agreement and use each other’s transport space to complete related transport services in their respective transport business as carriers.
Seven, about the construction service subcontract difference deduction.
Subcontract payments allowed to be deducted from the total price and out-of-pocket expenses obtained by taxpayers for providing construction services refer to the total price and out-of-pocket expenses paid to subcontractors.
Eight, on the cancellation of construction services simple tax items for the record.
If the general taxpayer providing construction services applies or chooses to apply the simple tax calculation method according to the regulations, the filing system will no longer be implemented. The following certification materials do not need to be submitted to the tax authorities, but are kept for future reference:
(a) to provide construction services for old construction projects, and to retain the building construction permits or the construction project contract;
(two) the construction services provided for the project provided by Party A and the construction services provided by the contractor shall be retained in the construction project contract.
Nine, on the reclamation of real estate projects for simple taxation.
Real estate projects that ordinary taxpayers in real estate development enterprises have acquired land by reclamation and developed, and the commencement date of reclamation indicated in the reclamation project "building construction permits" or the construction project contract is before April 30, 2016, which belongs to old real estate projects. You can choose to apply the simple taxation method to calculate and pay VAT at the rate of 5%.
X. Determination of the purchase price of restricted shares
(1) When a taxpayer transfers the restricted shares formed by the initial public offering and listing due to the simultaneous implementation of the share-trading reform and major asset restructuring, as well as the stock transfer and conversion arising from the above-mentioned shares from the first day of listing to the lifting of the ban, the opening price of the listed company’s shares on the first day of listing is taken as the purchase price, and the value-added tax is paid according to the "transfer of financial commodities".
(II) If a listed company suspends trading for many times due to the implementation of major asset restructuring, the "stock suspension" as mentioned in Item (3) of Article 5 of the Announcement of State Taxation Administration of The People’s Republic of China on Several Issues Concerning the Collection and Management of the Pilot Project of the Reform of Business Tax (State Taxation Administration of The People’s Republic of China Announcement No.53 in 2016 and State Taxation Administration of The People’s Republic of China Announcement No.31 in 2018) refers to the last suspension before the China Securities Regulatory Commission makes a decision on approving the application for major asset restructuring of listed companies.
Eleven, about the insurance service input tax deduction.
(1) If a taxpayer providing insurance services assumes the motor vehicle insurance liability by paying in kind, the input tax amount of the vehicle repair services purchased by itself from the vehicle repair service provider can be deducted from the output tax amount of the insurance company according to the regulations.
(2) If the taxpayer providing insurance services assumes the motor vehicle insurance liability by cash payment, the compensation payable to the insured shall be paid directly to the vehicle repair service provider, which does not belong to the vehicle repair service purchased by the insurance company, and the input tax shall not be deducted from the output tax of the insurance company.
(3) Other property insurance services provided by taxpayers shall be governed by the above provisions.
Twelve, about the application of catering service tax items
Taxpayers make food on the spot and sell it directly to consumers, and pay VAT according to "catering service".
XIII. On Issuing the Invoice of the Original Applicable Tax Rate
(1) Since September 20, 2019, if taxpayers need to issue blue-ink invoices with tax rates of 17%, 16%, 11% and 10% through the VAT invoice management system, they should submit the Letter of Commitment for Issuing Invoices with Original Applicable Tax Rates (Annex 2) to the competent tax authorities for temporary invoicing authority. The validity period of the temporary invoicing authority is 24 hours, and the taxpayer shall issue an invoice with the original applicable tax rate within the prescribed time limit for obtaining the temporary invoicing authority.
(two) the taxpayer shall keep the transaction contract, the red-ink invoice, the receipt of the payment certificate and other related materials for inspection.
(3) If the taxpayer fails to issue the invoice of the original applicable tax rate as required, the competent tax authorities shall handle it in accordance with the existing relevant regulations.
Fourteen, about the implementation time of this announcement.
Articles 1 and 2 of this announcement shall come into force as of the date of promulgation, and Articles 5 to 12 of this announcement shall come into force as of October 1, 2019. Matters that have not been dealt with before shall be implemented in accordance with this announcement, and matters that have been dealt with shall not be adjusted. Measures for the Administration of Small-scale Taxpayers in the Freight Transport Industry Applying for Special VAT Invoices (State Taxation Administration of The People’s Republic of China Announcement No.55, 2017), State Taxation Administration of The People’s Republic of China Announcement No.31 of 2018 was revised and released) Item (2) of Article 2, Notice of State Taxation Administration of The People’s Republic of China on Launching the Pilot Work of Issuing Special VAT Invoices on behalf of Internet Logistics Platform Enterprises (Tax General Letter [2017] No.579) Item (2) of Article 1, Announcement of State Taxation Administration of The People’s Republic of China on Simplifying the Filing of Simple Taxation Method for Construction Services (State Taxation Administration of The People’s Republic of China Announcement No.43 of 2017, State Taxation Administration of The People’s Republic of China)
It is hereby announced.
Attachment: 1. Tax Refund (Credit) Application Form
2. Letter of Commitment for Issuing the Invoice of the Original Applicable Tax Rate
State Administration of Taxation (SAT)
September 16, 2019