Announcement on Collection and Administration Matters Regarding VAT Reduction and Reduction of Small-Scale Taxpayers and Other Policies

State Administration of Taxation Announcement No. 1, 2023

According to the "Finance In accordance with the provisions of the Announcement of the Ministry of Taxation and the State Administration of Taxation on Clarifying the Policies for VAT Reduction and Reduction for Small-Scale Taxpayers (2023 No. 1, hereinafter referred to as Announcement No. 1), the collection management matters are now announced as follows:

1. If a small-scale VAT taxpayer (hereinafter referred to as a small-scale taxpayer) conducts VAT taxable sales and the total monthly sales does not exceed 100,000 yuan), if one quarter is regarded as a tax period, the quarterly sales do not exceed 300,000 yuan, the same below) is exempt from value-added tax.

If a small-scale taxpayer engages in VAT taxable sales, and the total monthly sales exceeds 100,000 yuan, and the sales amount after deducting the real estate sales in the current period does not exceed 100,000 yuan, the sales of goods, labor, services, Sales from intangible assets are exempt from value-added tax.

2. Small-scale taxpayers that are subject to the VAT difference tax policy shall determine whether their sales after the difference can enjoy the VAT exemption policy stipulated in Article 1 of Announcement No. 1.

The sales amount of the difference is filled in the relevant column of "Tax-free Sales" in the "VAT and Additional Taxes Declaration Form (Applicable to Small-scale Taxpayers)".

3. Other individuals as mentioned in Article 9 of the "Implementation Rules of the Interim Regulations of the People's Republic of China on Value-Added Tax", and the rental income obtained from leasing real estate in the form of unified rent collection can be used during the corresponding lease period. If the monthly rental income after distribution does not exceed 100,000 yuan, the value-added tax will be exempted.

4. If a small-scale taxpayer obtains taxable sales and is subject to the VAT exemption policy stipulated in Article 1 of Announcement No. 1, the taxpayer may choose to waive tax exemption for the sales and issue a special VAT bill.

5. If a small-scale taxpayer obtains taxable sales and applies the 1% reduced value-added tax policy stipulated in Article 2 of Announcement No. 1, it shall issue a value-added tax invoice at the 1% tax rate. . Taxpayers can choose to forgo tax deductions for this sales revenue and issue special VAT invoices.

6. If a small-scale taxpayer obtains taxable sales, the tax liability will be incurred as of December 31, 2022, and a value-added tax invoice has been issued. If it is necessary to issue a loss due to sales discounts, suspensions or returns, etc., an invoice for the corresponding collection rate loss or tax exemption loss shall be issued; if the invoice is incorrect and needs to be reissued, a collection rate deficit invoice or tax exemption deficit invoice shall be issued, and the correct one shall be reissued. Invoice in blue.

7. If a small-scale taxpayer engages in VAT taxable sales and the total monthly sales exceeds 100,000 yuan, the VAT-exempt sales and other items should fill in the "VAT and Additional Tax Declaration" Table (applicable to small-scale taxpayers)" relevant columns of "Sales for piecemeal enterprises exempted from taxation" or "Sales below the threshold"; For sales that are subject to VAT at the 1% refund rate, fill in the "VAT and In the corresponding columns of the Additional Tax Declaration Form (applicable to small-scale taxpayers) and "VAT-exclusive sales (3% collection rate)", the deductible VAT amount is calculated as "VAT and surcharge" based on 2% of sales. Tax Declaration Form (Applicable to Small-scale Taxpayers)" "Deduction Amount of Tax Payable for the Current Period" and "Details of Declaration of Value-Added Tax Reduction and Reduction" Tax Reduction

8. Small-scale taxpayers who pay taxes within a certain period People can choose one month or one quarter as the tax payment period. Once selected, it cannot be changed within 1 fiscal year.

9. Small-scale taxpayers who are required to prepay VAT according to current regulations, and whose monthly sales in the place of prepayment do not exceed 100,000 yuan, do not need to prepay tax in the current period. If a withholding and payment unit achieves monthly sales of more than 100,000 yuan, the withholding and payment items with a withholding rate of 3% are applicable, and the value-added tax is reduced at a withholding and payment rate of 1%.

10. For small-scale taxpayers and individual employers who sell real estate, the tax payment period shall be determined in accordance with Article 9 of this announcement and other current policies. Whether to prepay value-added tax; for other individuals selling real estate, continue Exempt from VAT in accordance with current regulations.

11. "Announcement of the Ministry of Finance, State Administration of Taxation and General Administration of Customs on Relevant Policies for Deepening Value-Added Tax Reform" (2019 No. 39) and Producer Service Taxpayers stipulated in Announcement No. 1, for the first time in the year If it is confirmed that the 5% super deduction policy is applicable, the "Declaration on the Application of the 5% Super Deduction Policy" should be submitted through the electronic tax bureau or the tax service hall (see Appendix 1); "Notice on Clarifying the Life Service Industry by the Ministry of Finance and the State Administration of Taxation "Announcement on the Value-Added Tax Super Deduction Policy" (2019 No. 87) and Announcement No. 1 of the daily service industry taxpayers who confirm that the 10% super deduction policy is applicable for the first time in the year should go through the electronic tax bureau or tax payment service The lobby submits a "Declaration on the Application of the 10% Super Deduction Policy" (see Appendix 2).

12. Other collection and management matters for taxpayers applying the super deduction policy shall be in accordance with the "Announcement of the State Administration of Taxation on Input Tax Deduction for Domestic Passenger Transport Services and Other Value-Added Tax Collection and Management Issues" (No. 31 of 2019) No.) Article 2 and other relevant provisions shall be implemented.

13. Taxpayers shall apply for withholding or refund of tax paid in accordance with Article 4 of Announcement No. 1. If a special value-added tax invoice has been issued to the buyer, the special value-added tax invoice should be recovered first.

14. This announcement will come into effect on January 1, 2023. Article 8 of the "Announcement of the State Administration of Taxation on Matters Related to Deepening the Reform of Value-Added Tax" (No. 14, 2019) and the Annex "Statement on the Application of Super Credit Policy", "Announcement of the State Administration of Taxation on Matters Concerning the Management of Value-Added Tax Invoices and Other Related Matters" Announcement") No. 33 of 2019) Article 1 and the appendix "Statement on the Application of the 15% Super Credit Policy", "Announcement of the State Administration of Taxation on Supporting the Resumption of Work and Business of Individual Industrial and Commercial Households and Other Tax Collection Management Matters") No. 33 of 2020 No. 5) Articles 1 to 5, "Announcement of the State Administration of Taxation on Issues Concerning the Exemption of Small-scale Taxpayers from Value-Added Tax Collection" (2021)

Legal basis:

"China Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China

Article 1 These Regulations are formulated in accordance with the Individual Income Tax Law of the People's Republic of China (hereinafter referred to as the Personal Income Tax Law).

Article 2 The term “residence in China” as used in the Personal Income Tax Law refers to habitual residence in China due to household registration, family, and economic interests; the so-called income obtained from within China and outside China refers to income obtained from China and abroad. They refer to income sourced within China and income sourced outside China respectively.

Article 3 Unless otherwise stipulated by the financial and taxation authorities of the State Council, the following income, regardless of whether the place of payment is within the territory of China, shall be income derived from within the territory of China:

( 1) Income obtained from providing services in China due to taking office, being employed, performing contracts, etc.;

(2) Income obtained from leasing property to lessees for use in China;

(3) Income obtained from licensing various franchises to be used within China;

(4) Income obtained from transferring real estate and other properties within China or other properties within China;

(5) Interest, dividends and bonus income obtained from enterprises, institutions, other organizations and resident individuals in China.

Article 4 If an individual without domicile in China resides in China for a cumulative total of 183 days but less than six consecutive years in a year, he or she originates from outside China and is provided by an overseas unit after filing with the competent tax authority. Or income paid by an individual is exempt from personal income tax; if he leaves the country for more than 30 days in any year when he has lived in China for a total of 183 days, his consecutive years of residence in China for a total of 183 days will be restarted. .

Article 5 If an individual without domicile in China resides in China for a total of no more than 90 days in a tax year, his or her income from sources in China shall be paid by the overseas employer and shall not be paid by the employer in China. The portion borne by institutions and places within China is exempt from personal income tax.

Article 6 The scope of various personal incomes stipulated in the Personal Income Tax Law:

(1) Wage and salary income refers to the wages and salaries received by individuals due to their employment or employment , bonuses, year-end salary increases, labor dividends, allowances, subsidies and other income related to office or employment.

(2) Income from labor remuneration refers to the income obtained by individuals engaged in labor services, including design, decoration, installation, drawing, laboratory testing, medical treatment, law, accounting, consulting, lecturing, translation, review, etc. Income from manuscripts, calligraphy and painting, engraving, film and television, audio and video recording, performances, performances, advertising, exhibitions, technical services, introduction services, brokerage services, agency services and other services.

(3) Income from author remuneration refers to the income an individual obtains from the publication or publication of his or her works in the form of books, newspapers, periodicals, etc.

(4) Income from royalties refers to the income obtained by individuals from providing the right to use patent rights, trademark rights, copyrights, non-patented technologies and other franchises; the income obtained from providing the right to use copyrights , excluding royalties.

(5) Business income refers to:

1. The income obtained by individual industrial and commercial households from engaging in production and business activities, from the sources of investors in sole proprietorships and individual partners in partnerships Income from the production and operation of sole proprietorships and partnerships registered in the country;

2. Income obtained by individuals from running schools, medical treatment, consulting and other paid service activities in accordance with the law;

3 .Income obtained by individuals from contracting operations, leasing operations, subcontracting, and subletting of enterprises and institutions;

4. Income obtained by individuals from other production and business activities.

(6) Interest, dividends, and bonus income refer to interest, dividends, and bonus income obtained from individuals owning debts, equity, etc.

(7) Income from property leasing refers to the income obtained by individuals from leasing real estate, machinery and equipment, vehicles, ships and other properties.

(8) Income from property transfer refers to the income obtained by individuals from the transfer of securities, equity, property shares in partnerships, real estate, machinery and equipment, vehicles and ships, and other properties.

(9) Incidental income refers to an individual’s income from winning a prize, winning a prize, winning a lottery, and other incidental income.

If it is difficult to define taxable income items for personal income, it shall be determined by the taxation department of the State Council.

Article 7: The measures for levying personal income tax on income from stock transfers shall be separately stipulated by the State Council and reported to the Standing Committee of the National People's Congress for the record.

Article 8 The forms of personal income include cash, physical objects, securities and other forms of economic interests; if the income is physical, the taxable income shall be calculated according to the price indicated on the voucher obtained. If the physical object without a certificate or the price indicated on the certificate is obviously low, the taxable income shall be determined with reference to the market price; if the income is securities, the taxable income shall be determined based on the face value and market price; if the income is other For forms of economic benefits, the taxable income shall be determined with reference to the market price.

Article 9 The term “treasury bond interest” as mentioned in Item 2 of Article 4, Paragraph 1, of the Personal Income Tax Law refers to the interest earned by individuals holding bonds issued by the Ministry of Finance of the People’s Republic of China and the People’s Republic of China; Interest on financial bonds issued by the state refers to the interest earned by individuals holding financial bonds issued with the approval of the State Council.

Article 10 The subsidies and allowances issued in accordance with unified national regulations as mentioned in Item 3 of Article 4, Paragraph 1, of the Personal Income Tax Law refer to special government allowances and academician allowances issued in accordance with the regulations of the State Council. and other subsidies and allowances exempted from personal income tax as stipulated by the State Council.

Article 11 The welfare fees referred to in Item 4 of Article 4, Paragraph 1 of the Personal Income Tax Law refer to the welfare fees withdrawn from enterprises, institutions, state agencies, and social organizations in accordance with relevant national regulations. Or the living allowances paid to individuals from trade union funds; the so-called relief funds refer to the living allowances paid to individuals by the civil affairs departments of people's governments at all levels.

Article 12 The income of diplomatic representatives, consular officials and other personnel of various countries’ embassies and consulates in China that should be exempted from tax in accordance with relevant laws as mentioned in Item 8 of Article 4, Paragraph 1 of the Personal Income Tax Law , refers to income that is tax-free in accordance with the "Regulations of the People's Republic of China on Diplomatic Privileges and Immunities" and the "Regulations of the People's Republic of China on Consular Privileges and Immunities".

Article 13 Other deductions determined in accordance with the law as mentioned in Item 1 of Article 6, Paragraph 1 of the Personal Income Tax Law include personal payment of enterprise annuities and occupational annuities in compliance with national regulations, and personal purchases in compliance with national regulations. Expenditures on commercial health insurance, tax-deferred commercial pension insurance, and other items that can be deducted as stipulated by the State Council.

Special deductions, special additional deductions and other deductions determined in accordance with the law are limited to the taxable income of resident individuals in a tax year; if the deductions are not completed in a tax year, they will not be carried forward for deduction in subsequent years.

Article 14 Each term referred to in Item 2, Item 4, and Item 6 of Paragraph 1 of Article 6 of the Personal Income Tax Law shall be determined in accordance with the following methods:

( 1) If the income from labor remuneration, author remuneration, and royalties is a one-time income, the income shall be regarded as one time; if it is a continuous income from the same project, the income obtained within one month shall be regarded as one time.

(2) Income from property rental shall be regarded as income obtained within one month.

(3) Income from interest, dividends, and bonuses shall be regarded as income obtained when interest, dividends, and bonuses are paid.

(4) Incidental income shall be counted as one time each time the income is obtained.

Article 15 The costs and expenses mentioned in Item 3 of Article 6, Paragraph 1 of the Personal Income Tax Law refer to the various direct expenditures incurred in production and business activities and the indirect expenses allocated to the costs. As well as sales expenses, administrative expenses, and financial expenses; the so-called losses refer to the inventory losses, damage, scrapping losses of fixed assets and inventories that occur during production and operating activities, losses from transferred properties, losses from bad debts, natural disasters and other force majeure factors. losses and other losses.

For individuals who obtain business income and have no comprehensive income, when calculating their taxable income for each tax year, they shall deduct RMB 60,000 in expenses, special deductions, special additional deductions and other items determined in accordance with the law. deduct. Special additional deductions are deducted when handling final settlement.

If you are engaged in production or business activities and fail to provide complete and accurate tax information and cannot correctly calculate the taxable income, the taxable income or tax payable shall be determined by the competent tax authorities.

Article 16 The original value of property specified in Item 5 of Article 6, Paragraph 1 of the Personal Income Tax Law shall be determined in accordance with the following methods:

(1) Securities, which are purchased The purchase price and the relevant fees paid in accordance with the regulations when buying;

(2) Buildings, including construction fees or purchase prices and other relevant fees;

(3) Land use Rights, including the amount paid to obtain land use rights, costs for developing the land, and other related expenses;

(4) Machinery and equipment, vehicles and ships, including the purchase price, transportation fees, installation fees, and other related expenses .

For other properties, the original value of the property shall be determined by referring to the method specified in the preceding paragraph.

If the taxpayer fails to provide a complete and accurate certificate of the original value of the property and cannot determine the original value of the property according to the method stipulated in paragraph 1 of this article, the original value of the property shall be determined by the competent tax authority.

The term “reasonable expenses” as mentioned in Item 5 of Article 6, Paragraph 1 of the Personal Income Tax Law refers to the relevant taxes and fees paid in accordance with regulations when selling property.

Article 17: For income from property transfer, tax shall be calculated based on the balance of the income from a single transfer of property minus the original value of the property and reasonable expenses.

Article 18 If two or more individuals obtain income from the same item at the same time, the income obtained by each individual shall be calculated and taxed separately in accordance with the provisions of the Personal Income Tax Law.

Article 19: The term “individuals donating their income to public welfare undertakings such as education, poverty alleviation, and relief for those in need” as mentioned in paragraph 3 of Article 6 of the Personal Income Tax Law means that individuals use their income to pass through Donations made by public welfare social organizations and state agencies to education, poverty alleviation, relief and other public welfare charities; the so-called taxable income refers to the taxable income before the deduction of the donation amount.

Article 20: Comprehensive income and business income obtained by resident individuals from within China and overseas shall be combined to calculate the tax payable; other income obtained from within China and overseas shall be calculated separately. Forehead.

Article 21 The amount of personal income tax paid abroad as mentioned in Article 7 of the Personal Income Tax Law refers to the income of resident individuals from outside China. According to the laws of the country (region) where the income originates, The amount of income tax that should be paid and actually paid.

The tax payable on a taxpayer’s overseas income calculated in accordance with the provisions of this law, as referred to in Article 7 of the Personal Income Tax Law, is the amount of income tax that can be deducted by resident individuals from comprehensive income, business income and other income paid overseas. limit (hereinafter referred to as the credit limit).

Unless otherwise stipulated by the finance and tax authorities of the State Council, the sum of the credit limit for comprehensive income, the credit limit for business income, and the credit limit for other income from a country (region) outside China shall be the sum of the credit limit for income from that country (region). Income credit limit.

If the actual amount of personal income tax paid by a resident individual in a country (region) outside China is lower than the credit limit for income derived from that country (region) calculated in accordance with the provisions of the preceding paragraph, he shall be China pays the tax on the balance; if the credit limit for income from that country (region) is exceeded, the excess portion shall not be deducted from the tax payable in the current tax year, but it may be derived from that country (region) in subsequent tax years. region), the balance of the credit limit earned will be deducted from the balance. The maximum deduction period shall not exceed five years.

Article 22 To apply for a credit for personal income tax paid overseas, a resident individual shall provide the relevant tax payment certificate issued by the overseas tax authority for the year to which the tax belongs.

Article 23 The interest stipulated in Paragraph 2 of Article 8 of the Personal Income Tax Law shall be based on the RMB loan benchmark announced by the People's Bank of China on the last day of the tax return period to which the tax belongs for the same period as the tax payment period. The interest rate is calculated on a daily basis from the day after the tax return period expires to the day when the back tax payment period expires. If a taxpayer pays back taxes before the expiration of the time limit for back payment of taxes, interest will be charged until the date of back payment of taxes.

Article 24: When a withholding agent pays taxable amounts to individuals, the tax shall be withheld or withheld in accordance with the provisions of the Individual Income Tax Law, paid to the treasury on time, and shall be recorded in a special record for future reference.

The payment referred to in the preceding paragraph includes cash payment, remittance payment, transfer payment and payment in the form of securities, in kind and other forms.

Article 25 The circumstances under which comprehensive income needs to be settled and settled include:

(1) Comprehensive income is obtained from two or more sources, and the annual income of the comprehensive income is reduced by The balance excluding special deductions exceeds 60,000 yuan;

(2) Obtain one or more income from labor remuneration income, author remuneration income, and royalties income, and the annual comprehensive income is deducted from special deductions The balance of the deduction exceeds 60,000 yuan;

(3) The amount of prepaid tax during the tax year is lower than the amount of tax payable;

(4) The taxpayer applies for a tax refund.

Taxpayers applying for tax refunds should provide their bank accounts opened in China and handle tax refunds locally at the place of settlement and settlement.

The specific measures for final settlement and payment shall be formulated by the taxation department of the State Council.

Article 26 The term “full withholding declaration for all employees” as mentioned in Paragraph 2 of Article 10 of the Personal Income Tax Law means that the withholding agent shall, within the 15th day of the month following the month in which the tax is withheld, submit to The competent tax authorities shall report relevant information of all individuals to whom they pay income, the amount of income paid, deduction items and amounts, the specific amount and total amount of tax withheld, and other relevant tax-related information.

Article 27: Specific measures for the location of taxpayers’ tax declarations and other related matters shall be formulated by the taxation department of the State Council.

Article 28: When individual residents obtain wages and salaries, they may provide relevant information on special additional deductions to the withholding agent, and the withholding agent will deduct the special additional deductions when withholding taxes. If a taxpayer obtains wage and salary income from two or more places at the same time, and the withholding agent deducts special additional deductions, the same special additional deduction item can only be deducted from the income obtained from one place in a tax year.

Resident individuals who obtain income from labor remuneration, author remuneration, and royalties shall provide relevant information to the tax authorities during the final settlement and deduct special additional deductions.

Article 29: Taxpayers may entrust withholding agents or other units and individuals to handle settlement and settlement.

Article 30: Withholding agents shall calculate and handle withholding declarations based on the information provided by taxpayers, and shall not change the information provided by taxpayers without authorization.

If a taxpayer discovers that the personal information, income, tax withheld, etc. provided or reported by the withholding agent are inconsistent with the actual situation, the taxpayer has the right to request the withholding agent to make corrections. If the withholding agent refuses to make the amendment, the taxpayer shall report it to the tax authorities, and the tax authorities shall handle it in a timely manner.

Taxpayers and withholding agents shall preserve information related to special additional deductions in accordance with regulations. The tax authorities may conduct spot checks on the special additional deduction information provided by taxpayers. The specific measures shall be separately prescribed by the taxation department of the State Council.

If the tax authorities discover that a taxpayer has provided false information, they shall order it to make corrections and notify the withholding agent; if the case is serious, the relevant departments shall handle it in accordance with the law, include it in the credit information system and implement joint punishments.

Article 31: If the final settlement information provided by a taxpayer when applying for a tax refund is incorrect, the tax authorities shall notify the taxpayer to make corrections; if the taxpayer makes corrections, the tax authorities shall process the tax refund in a timely manner.

If the withholding agent fails to deposit the withheld tax into the treasury, it will not affect the taxpayer's application for tax refund in accordance with regulations. The tax authorities shall handle tax refund based on the relevant information provided by the taxpayer.

Article 32: If the income is in a currency other than RMB, the taxable income shall be calculated in RMB according to the central parity rate of the RMB exchange rate on the last day of the last month when tax declaration or withholding declaration is made. If the final settlement is carried out after the end of the year, the income in currencies other than RMB that has been prepaid on a monthly, quarterly or per-time basis will not be re-converted; the part of the income that should be paid back tax will be calculated according to the previous tax year. The central parity rate of the RMB exchange rate on the last day is converted into RMB to calculate the taxable income.