Announcement of the State Taxation Administration on Cancelling VAT Deduction Voucher Certification and Confirmation Period and Other VAT Collection and Management Issues

Canceling the VAT deduction voucher certification and confirmation period and other VAT collection and management issues are hereby announced as follows:

I. For general VAT payers who have obtained VAT special invoices, Customs import VAT special payment books, uniform invoices for motor vehicle sales and general electronic invoices for toll VAT for toll roads issued on or after January 1, 2017, the periods for certification confirmation, audit comparison and deduction declaration shall be abolished. Upon VAT reporting, taxpayers should verify the purposes of vouchers mentioned above on the comprehensive service platform for VAT invoice of the province (autonomous region, municipality directly under the central government and city under separate state planning) in which they reside.

General VAT payers, who obtained special VAT invoices, Customs import VAT special payment books, uniform invoices for motor vehicle sales and electronic VAT general invoices for toll roads issued on or before December 31, 2016, beyond the periods for certification, verification and deduction declaration but meeting specified conditions, could still enjoy input VAT deduction in accordance with the Announcement of the State Taxation Administration on Overdue VAT Deduction Voucher Deduction Issues (amended by the 2011 No.50 Announcement, 2017 No.36 Announcement of the State Taxation Administration and 2018 No.31 Announcement) and the Announcement of the State Taxation Administration on Issues of Failing to Declare Deduction Vouchers for the Deduced VAT on Time (amended by the 2011 No.78 announcement and the 2018 No.31 announcement of the State Taxation Administration).

II. Taxpayers enjoy the "actual rebate upon collection" VAT policy. If a taxpayer enjoys the policy of immediate VAT refund and has the condition requirement of tax credit level, the tax credit level of the period to which the taxpayer applies for tax refund shall be determined. Where the tax credit rating changes in the period of tax rebates applied for, the changed rating applies.

For taxpayers applying for the rebate of VAT retained, in the case of tax credit rating requirement, the rating of taxpayers when they apply to the competent tax authority for the rebate of VAT retained and submit the Tax Rebate (Deduction) Application Form shall apply.

III. According to the Announcement of the Ministry of Finance and the General Administration of Customs on Deepening VAT Reform Policies (No.39, 2019) and the Announcement of the Ministry of Finance and State Taxation Administration on Clarifying the Rebate of Period-end VAT Retained for Some Advanced Manufacturing Industries (No.84, 2019), when calculating the input component of the incremental tax retained that is allowed to be refunded, the input tax transferred out as required during the period from April 2019 to the taxable period prior to the taxpayer applying for the rebate, needs not to be deducted from the VAT amounts specified on the special VAT invoices, Customs import VAT special payment books, uniform invoices for motor vehicle sale and tax payment vouchers that have been deducted.

IV. Subcontract income received from general contractors within China by entities and individuals as subcontractors within the territory of the People's Republic of China (within China) for rendering construction services for projects outside China, is the "income deemed as received from abroad" under Article 6 of theAnnouncement of the State Taxation Administration on Issuing of Measures for the Exemption of Value-added Tax on Cross-border Taxable Activities under the Collectionof Value-added Tax in Lieu of Business Tax (for Trial Implementation)(amended by the 2016 No.29 Announcement and the 2018 No.31 Announcement of the State Taxation Administration).

V. Animal medical services like prevention, diagnosis, treatment of animal diseases and sterilization provided by animal clinics are the "breeding and disease prevention of poultry, livestock and aquatic animals" under Article10 of the Regulation of Pilot Policy of Levying Value-Added Tax in Lieu of Business Tax (CS (2016) No.36, Annex 3).

Animal clinics selling animal food and articles, and offering cleaning, beauty, temporary care and other services should pay VAT according to existing regulations.

Animal clinics refer to entities having obtained animal clinic licenses according to the Administrative Measures for Animal Diagnosis and Treatment Institutions (enacted by the No.19 Decree of the Ministry of Agriculture, and amended by 2016 No.3 and 2017 No.8 Decrees of the Ministry of Agriculture) and offering diagnosis and treatment services within a specified scope.

VI. Article 2 of the Measures for the Administration of Applying for Special VAT Invoices on behalf of Small Taxpayers in Cargo Transport Industry (enacted by the 2017 No.55 Announcement and amended by 2018 No.31 Announcement of the State Taxation Administration) is amended as follows:

"Article 2 To VAT payers meeting all the following conditions ("taxpayers"), these Measures apply:

(I) Render road or inland-river cargo transport services within the territory of the People's Republic of China (within China) with tax registration finished (including temporary tax registration).

(II) Render road cargo transport (except for general road cargo transport operation with general freight vehicles of capacity, not more than 4.5 tons) with the Road Transport Business License of the People's Republic of China and the Road Transport Certificate of the People's Republic of China; Render inland-river cargo transport services with the Business License of Domestic Waterway Transport and the Certificate of Business Transport Ship.

(III) Regulated as small VAT taxpayers by the competent tax authority of the place of tax registration."

VII. Revenue from fiscal subsidies received by taxpayers are directly related to their income or quantity of selling goods, labor, service, intangible assets and real estates, and is subject to VAT calculation. Revenue from fiscal subsidies in other forms received by taxpayers are not VAT taxable income, and not subject to VAT.

Before this announcement is put into force, to central financial subsidies received by taxpayers, the Announcement of the State Taxation Administration on VAT to Central Financial Subsidies (No.3, 2013) still applies; to those having already reported for VAT payment, the red-letter VAT invoices could be issued according to existing red-letter invoice management rules, and the central fiscal subsidies deducted from the sales.

VIII. Article I of this announcement takes effect on March 1, 2020 and Articles II to VII January 1, 2020. Matters occurring before such time yet not treated are to be handled according to this Announcement, and matters treated are not subject to any further adjustments. The Announcement of the State Taxation Administration on VAT to Central Financial Subsidies (No.3, 2013) and Article 5 of the Announcement of the State Taxation Administration on the Input Tax Dedication and Other VAT Collection and Administration Issues on Domestic Passenger Transport Services (No.31, 2019) shall be abolished on January 1, 2020. Article 2 of the Notice of the State Taxation Administration on Issues Concerning Input Tax Tax Credit for Special VAT Invoices Issued by the Anti-Counterfeit Tax Control System to General VAT Payers (GSF [2003] No.17), the Notice of the State Taxation Administration on Issues Concerning the Adjustment of the Deduction Period for VAT Deduction Vouchers (GSH [2009] No.617), the Notice of the State Taxation Administration on the VAT Deduction Voucher Certification and Auditing for General VAT Payers during the Earthquake Relief Period (GSH [2010] No.173), Article 10 of the Notice of the State Taxation Administration on Further Clarifying Issues Concerning Collecting Value-added Tax in lieu of Business Tax (amended by 2017 No.11 Announcement and 2018 No.31 Announcement of the State Taxation Administration), and Article 4 of the Announcement of the State Taxation Administration on Management of Value-added Tax Invoices (No.33, 2019) shall be abolished on March 1, 2020. The Measures for the Administration of Applying for Special VAT Invoices on behalf of Small Taxpayers in Cargo Transport Industry (enacted by the 2017 No.55 Announcement and amended by 2018 No.31 Announcement of the State Taxation Administration) shall be amended according to this Announcement and re-released.

It is hereby notified.

State Taxation Administration

December 31, 2019