Sept. 19 – The Beijing Municipal Office of the State Administration of Taxation (SAT) released the “Announcement on Matters Concerning the Administration of the Value-Added Tax(VAT) Preferential Policies during the Business Tax to VAT Pilot Conversion Period (Announcement  No.8, hereafter referred to as ‘Announcement’)” on September 3, clarifying issues regarding the administration of related VAT preferential policies during the business tax to VAT pilot conversion period in the transportation industry and certain areas of the modern services industries. Key provisions of the Announcement can be found below.
For the following preferential items, a pilot taxpayer shall, prior to declaration of tax-free turnover or application for enjoying preferential policies, submit two copies of the Record Registration Form for the Preferential Policies of Beijing to tax authorities during the business tax to VAT pilot conversion period, together with the related documents for the record formalities.
For taxpayers providing technology transfer, technology development and related technology consultation and services, the submitted materials shall include:
- Written contracts on technology transfer or technology development approved by the competent provincial-level science and technology department and one copy thereof
- Documents showing the examination and approval opinions issued by the provincial-level science and technology department concerned and one copy thereof
For taxable services provided by enterprises engaged in the offshore service outsourcing business:
For tax levied on the balance of VAT (taxpayers originally subjected to the business tax based on the balance specified in the State’s policies on business tax)
A pilot taxpayer who has registered the collection of VAT in lieu of business tax with the competent tax authorities before September 1, 2012, but has not gone through the filing-for-record formalities or the examination and approval formalities for enjoying VAT preferential policies, cannot enjoy the relevant tax preferential policies from December 1, 2012.
A pilot taxpayer, who registers the collection of VAT in lieu of business tax with the competent tax authorities on and after September 1, 2012, but does not go through the filing-for-record formalities or the examination and approval formalities for enjoying VAT preferential policies, cannot enjoy the relevant tax preferential policies.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
You can stay up to date with the latest business and investment trends across China by subscribing to The China Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.