Value-added tax: Value-added tax is a turnover tax levied according to the value-added amount of goods (including taxable services) in circulation. From the tax principle, value-added tax is a turnover tax levied on the added value of many links such as commodity production, circulation and labor services or the added value of commodities. Extra-price tax is implemented, that is, it is borne by consumers, and tax is levied only if there is value added, and tax is not levied if there is no value added.

Differential taxation: "The taxable turnover determined by differential method" refers to the taxable turnover when taxpayers provide taxable business tax services, transfer intangible assets or sell real estate in People's Republic of China (PRC), and the balance after deducting the amount that can be deducted according to regulations is taxable turnover.

Difference = total turnover-paid to another turnover (cost)

Two. Scope of value-added tax collection

General scope

The scope of taxation of value-added tax includes the sale (including import) of goods and the provision of processing, repair and replacement services.

Special project

Commodity futures (including commodity futures and precious metal futures);

Commodity futures are subject to value-added tax, and taxes are paid at the time of physical delivery;

The business of selling gold and silver by banks;

Pawnshops sell dead goods;

Consignment business is the business of customers selling consignment goods;

Other units and individuals outside the postal department produce, distribute and sell philatelic products.

Special behavior

Regarded as sales: The following eight acts are regarded as selling goods in the VAT Law, and all of them are subject to VAT.

1. Deliver the goods to others for consignment.

2. Selling goods on behalf of others.

3. Transferring goods from one place to another (except the same county and city).

4. Use the self-produced or entrusted goods for non-taxable items.

5. Take the goods produced, entrusted or purchased as investments in other units.

6. Distribute the self-produced, commissioned or purchased goods to shareholders or investors.

7. Use the self-produced entrusted goods for employee welfare or personal consumption.

8. Give the self-produced, commissioned or purchased goods to others free of charge.

Legal basis:

According to Article 4 of the Provisional Regulations on Value-added Tax in People's Republic of China (PRC), except for Article 11 of these regulations, the taxable amount of taxpayers selling goods, services, intangible assets and real estate (hereinafter referred to as taxable sales) is the balance of the current output tax after deducting the current input tax.

Calculation formula of tax payable:

Taxable amount = current output tax-current input tax

When the current output tax is less than the current input tax, the insufficient part can be carried forward to the next period for further deduction.

Article 5. When taxpayers make taxable sales, the value-added tax levied according to the sales amount and the tax rate stipulated in Article 2 of these Regulations is the output tax.

Output tax calculation formula:

Output tax = sales × tax rate

Article 6 Sales amount refers to the total price and other expenses collected by taxpayers in taxable sales activities, but does not include the output tax collected.

To sum up, we know that the specific legal meaning of the VAT differential tax policy is that taxpayers should pay VAT by purchasing tax deduction.