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Further Expansion of the Pilot Program for Small-scale Tax Payers’ Independent Issuance of Special VAT Invoices

Issuance Date: January 26, 2018 Source: General Office of the State Administration of Taxation

After the pilot program for small-scale tax payers’ independent issuance of special VAT invoices is implemented in accommodation sector, authentication and consulting sector and construction sector, the State Administration of Taxation (SAT) recently published the Announcement on Several Matters Concerning the Administration of Value-added Tax Invoices. According to the Announcement, the small-scale tax payers in industry and information transmission, and software and IT service industry will be included in the pilot program since February 1, 2018. The tax payers concerned can either issue the special VAT invoices independently or apply to the SAT’s offices for issuance of VAT invoices on their behalf. This will further enhance the invoices-related service level and guarantee tax payers’ access to reform dividend.

As the leader of the SAT’s Goods and Services Tax Department said, China’s tax payers of value-added tax are divided into general tax payers and small-scale tax payers according to accounting level and business scale. In fact, the small-scale tax payers, who wanted to use special VAT invoices, once had to apply to tax authorities for issuance of VAT invoices on their behalf only after they completed tax payment, but they had to travel to and from tax service halls. It’s really a time-consuming and labor-consuming process.

“After the VAT pilot program, some employees who come back from business trips often complain that the special VAT invoices can’t be issued by economical hotels and hostels. We can get the cost of this sort deducted.” Li Wenhui from Jiangxi Yuyao Shaohui Trade Co., Ltd.

Given the particularities of accommodation industry, the SAT introduced the nationwide pilot program for small-scale tax payers’ independent issuance of special VAT invoices since November 2016 after the pilot program was completed in some cities. The policy on pilot program streamlined the issuance procedure of special VAT invoices and reduce the time involved in tax service. Meanwhile, the small-scale tax payers in accommodation sector can issue special VAT invoices for their clients in a real-time manner. This advantage will help attract clients and maintain and expand operations.
“After the VAT pilot program was launched on a full scale, a growing number of clients require the issuance of special VAT invoices. As a small-scale tax payer, we had to apply for special VAT invoices in tax service halls. As you know, it took a lot of time. Now we can issue the special VAT invoices for clients on site. Our clients are carefree and we’re risk-free.” Yang Huifen, the legal person of Jiangsu Changzhou Anqinhai Holiday Hotel, said.

The small-scale tax payers from authentication and consulting sector were included in the pilot program on March 1, 2017 after the small-scale tax payers in accommodation sector can independently issue the special VAT invoices.

The authentication and consulting sector is the modern service sector which is mainly engaged in certification, authentication and consulting service when professional qualification is the basis. This sector involves accounting, tax, law, asset evaluation and engineering cost. In fact, it’s one of the main users of special VAT invoices among all the industries involved in the VAT pilot program. The SAT’s inclusion of this sector in the pilot program is an innovative attempt made by tax authorities at tax administration system. This is expected to facilitate tax payers, offer vigorous supports for small and micro enterprises and sharpen their competitiveness.

To help tax payers have more convenient issuance and use of invoices, the SAT expanded the scope of pilot program again on June 1, 2017 to include the small-scale tax payers of construction sector in the pilot program.

Ningbo Yinzhou Zhongwei Rolling Shutters Co., Ltd. is a small-scale tax payer from construction sector. Its financial leader Fu Xu said that “we have about eight special VAT invoices issued by the tax authorities each month, each with an amount of several thousand yuan and even over one hundred thousand yuan. After the new policy was implemented, we save the trouble of travelling to and from tax business hall. So we can save time and operating cost at the same time.”

The pilot program in which the small-scale tax payers can access the reform dividend would be impossible without the ceaseless efforts of all the staff in tax system. It is known that, to ensure the success in the expansion of this pilot program, the tax authorities at all levels work together to make all the information and benefits available to tax payers concerned.

The Wuhan Municipal Office, SAT, organized special training program in different forms like displaying announcements on LED screens of tax service halls, and sending text messages and WeChat as the reminders of new policy in order to enhance the publicity work of pilot program and make the new policy known by more tax payers. The Xining Municipal Office, SAT provided customized training courses and doorstep mentoring for those qualified small-scale tax payers. The Jinan Municipal Office, SAT arranged special trainings to help the small-scale tax payers properly issue special VAT invoices and make tax declarations and include the pilot program in the employees’ annual performance assessment so that service quality can be improved.

“Thanks to the doorstep mentoring by tax authorities, we’ve learnt how to issue special VAT invoices independently. We can save the trouble of visiting the tax service hall, especially in harsh winter. Besides, we needn’t worry about any problems with tax declaration.” Li Wei, legal person of Xi’an Ontonomia Enterprise Management Information Consulting Co., Ltd. said.

According to Fan Yong, Professor of School of Taxation of Central University of Finance and Economics, the expansion of this pilot program will contribute to safeguarding the tax payers’ legitimate rights and interests, and effectively relieving the pressure of tax authorities from issuing special VAT invoices on behalf of small-scale tax payers.

As the report delivered at the 19th CPC National Congress, it’s imperative to transform government functions, streamline administration and delegate power more effectively, innovate supervisory methods, enhance government’s credibility and execution and build the service-oriented government to the satisfaction of people. The tax authorities will continue to make well-targeted efforts so as to guarantee the earnest reduction of burden, help tax payers access tangible reform dividends, create a better regulated and more impartial business environment and serve the economic and social development better.

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