Both the entrusting party and the entrusted party must pay VAT.

In actual operation, several situations must be distinguished:

1. If the consignor issues an invoice to the trustee during the consignment process, and the trustee issues an invoice to the customer, At this time, both the entrusting party and the entrusted party must make accounts according to normal purchases and sales and calculate the VAT on input and output items to pay VAT.

2. If the entrusting party directly invoices the customer for agency sales, and then pays an additional handling fee to the entrusted party, the entrusting party will pay VAT at this time, and the entrusted party will not pay VAT.

Value-added tax is a turnover tax levied based on the added value generated during the circulation of goods (including taxable services). In terms of tax calculation principles, value-added tax is a turnover tax levied on the added value of multiple links in the production, circulation, and labor services of goods or the added value of goods. Implement extra-price tax, that is, consumers will bear the burden. Taxes will only be levied if there is value-added, but no tax will be levied if there is no value-added.

Value-added tax is a tax levied on the value-added amount levied on units and individuals who sell goods or provide processing, repair and repair services, or import goods. Value-added tax has become one of the most important types of taxes in China. Value-added tax revenue accounts for more than 60% of China's total tax revenue, making it the largest tax type.

VAT is collected by the National Taxation Bureau, with 50% of the tax revenue coming from the central government and 50% from the local government. The value-added tax in the import process is collected by the customs, and all tax revenue is central fiscal revenue.

Extended information

The advantages of value-added tax are as follows:

1. It is conducive to the implementation of the principle of fair tax burden.

2. It is conducive to the rationalization of production and operation structure.

3. It is conducive to expanding international trade.

4. It is conducive to the country's widespread, timely and stable acquisition of fiscal revenue.

Starting from July 1, 2017, the VAT rate structure will be simplified, the 13% VAT rate will be cancelled, and the scope of goods to which the 11% tax rate will apply and the provisions for input tax deductions will be clarified. Starting from May 1, 2018, the value-added tax rate for manufacturing and other industries will be reduced from 17% to 16%, and the value-added tax rate for transportation, construction, basic telecommunications services and other industries, as well as agricultural products and other goods will be reduced from 11% to 10%. %.

On March 15, 2019, Premier Li Keqiang stated at the Second Session of the 13th National People's Congress in the Great Hall of the People in Beijing that the value-added tax will be reduced on April 1 and the social security fee rate will be reduced on May 1.

Baidu Encyclopedia--VAT