FAQ about Value-added Tax

1) Q：

Can the VAT special invoice issued by the tax bureau on behalf of small-scale taxpayer credit the Input VAT?

A：

Yes. The taxationrate for special invoice issued by proxy shall be 4% or 6%, and general taxpayer will use this special invoice as credit proof.

2) Q：

Can Foreign Investment Enterprise, being small-scale taxpayer, purchase home equipment with VAT refund?

A：

Yes. Home equipment purchased by non-VAT payer, small-scale taxpayer as well as Foreign Investment Enterprise set up in bonded area, in compliance with relevant requirements(GSF (1999) No. 171), can process refund of tax.

3) Q：

Can this company, being retail enterprise with annual turnover about RMB 2.1 million, refuse application for the qualification of general taxpayer?

A：

No. According to requirements, enterprise with annual turnover above RMB 1.8 million will apply to tax bureau to become general taxpayer.

4) Q：

Can plain invoice credit Input VAT?

A：

No. VAT special invoice recognized by the Tax Law can only credit Output VAT, but the amount of plain invoice can be included in purchase cost.

5) Q：

Can exported goods of small-scale taxpayer be entitled to refund of tax?

A：

According to prevailing policies concerning tax rebates (exemptions) for exported goods, the goods exported by small-scale taxpayer on their own or on consignment shall be free of VAT, consumption tax but without refund.

6) Q：

How can I apply for the qualification of general taxpayer who can issue VAT special invoice?

A：

Application for general taxpayer VAT special invoice shall fulfill the following conditions: