the Ministry of Finance, the State Administration of Taxation Circular of the Ministry of Finance and the State Administration of Taxation on Some Policies concerning Value-added Tax Cai Shui [2005] No. 165 The public finance departments (bureaus), bureaus of state taxes and those of local taxes of all provinces, autonomous regions, municipalities Upon deliberation, some problems concerning the value-added tax are hereby clarified as follows: 1. With regard to the determination of the time when the value-added tax obligation arises from the selling of self-produced goods, as 2. The determination of the time when tax obligation arises in the case of an enterprise’ selling of goods on the commission basis and (1) Where a taxpayer sells goods on a commission basis, if it receives the full payment or a partial payment for goods before receiving (2) Where a taxpayer fails to receive any payment for the goods and the checklist within 180 days after the consignment of the goods sold 3. Some issues concerning the offset of the amount of input tax of some particular goods to which value-added tax rates are applied differently Where value-added tax rates are applied differently to some particular goods (such as primary agricultural products and mineral products) Where competent tax authorities find that there are different value-added tax rates applicable to the same goods in the import link 4. With regard to the calculation and division of input tax which may not be offset against the value-added tax If the taxpayer concurrently engaging in any tax exempt item or non-taxable item (excluding fixed assets under construction) is unable Amount of input tax may not be offset = (Total amount of input tax of the current month Amount of input tax of the current month 5. With regard to the change of a general taxpayer of value-added tax (hereinafter referred to as the general taxpayer) into a small-scale Once a taxpayer is formally determined as a general taxpayer, it may not be changed back into a small-scale taxpayer. The change of 6. With regard to the inventory and the to-be-offset tax amount when a general taxpayer is cancelled Where a general taxpayer is changed into a small-scale taxpayer because it is cancelled or disqualified from being a general taxpayer 7. With regard to the offset upon transport invoices (1) Where a general taxpayer buys or sells any goods (excluding fixed assets outside the Northeast of China) by railway transport and (2) The transport freight paid by a VAT general taxpayer in its production or business operations may not be used to calculate the input (3) The international goods transport agency invoice and international goods transport invoice that a VAT general taxpayer obtains may (4) The transport invoice that a VAT general taxpayer obtains for all the goods it has purchased in an accumulative way is allowed to (5) The transport invoice that a VAT general taxpayer obtains but which is insufficiently filled out may not be used to calculate the 8. Whether to levy value-added tax on one-time fees collected by taxpayers engaging in public utilities Where one-time fees collected by a VAT taxpayer engaging in heating, electric power, gas, water supply, and other public utilities 9. Whether to levy value-added tax on the fees collected by taxpayers on behalf of administrative departments Where a fee collected by taxpayers on behalf of the relevant administrative department meets all of the following requirements and (1) It is approved by the State Council, the relevant department of the State Council, or the government at the provincial level; (2) Special voucher has been issued for the administrative charge upon approval of the public finance department; (3) Such fee is entirely turned over to the state treasury; or if not turned over to the state treasury, it shall be subject to government 10. With regard to the taxation issue relating to the insurance premiums, vehicle purchase tax and license plate fees collected on a commissioned Insurance premiums collected by a VAT taxpayer at the time of selling goods against the buyer for buying insurances for the goods 11. With regard to the issue of levying value-added tax on computer software products (1) The built-in software does not fall within the scope of the software products that may enjoy the preferential value-added tax policies (2) The income derived from the software installation fees, maintenance fees, and training fees which are collected upon the sale of the However, the maintenance fees, technical service fees, and training fees charged by installments or each time when the service is (3) For the income derived by a VAT taxpayer for the development of a software products upon the entrustment of anyone else, if of the 12. With regard to the taxation issue concerning printing enterprises entrusted by publishing enterprises to print newspapers, books and Where a printing enterprise buys paper by itself to print books, newspapers and magazines which have a code number (CN) or an ISBN 13. Income from membership fees The membership fees charged from value-added tax taxpayers shall not be subject to value-added tax. Ministry of Finance State Administration of Taxation November 28, 2005 |
the Ministry of Finance, the State Administration of Taxation
2005-11-28