China Clarifies Use of Special VAT Invoices for Export Tax Refunds

Posted by Reading Time: 2 minutes

Jun. 14 – To clarify issues that occur when foreign-trade enterprises apply for export tax refunds using special value-added tax (VAT) invoices which have been approved as input VAT creditable, the State Administration of Taxation (SAT) promulgated the “Announcement on Issues Concerning Applying for Export Rebates by Foreign Trade Enterprises Using Special Value-added Tax Invoice (SAT Announcement [2012] No. 22, hereinafter referred to as ‘Announcement’).” The Announcement specifies that foreign-trade enterprises can use special VAT invoices which have been approved as input VAT creditable to apply for export VAT. It further clarifies the appropriate treatment of special VAT invoices under different circumstances.

One of these circumstances is where the special VAT invoice duplicates have been lost. According to the “Regulation on Usage of Special VAT Invoices (guoshuifa [2006] No.156),” a special VAT invoice consists of three basic duplicates:

  • Invoice duplicate
  • Credit duplicate
  • Accounting duplicate

If the foreign-trade enterprise loses the invoice duplicate and credit duplicate of the special VAT invoice after the special VAT invoice has been verified, the accounting duplicate and a “Proof of Tax Clearance for Lost Special VAT Invoice” issued by the in-charge tax authority of the selling party can be used (upon approval of the in charge tax authority of the purchasing party) to apply for the export tax refund.

If the foreign-trade enterprise loses the credit invoice of the issued special VAT invoice after the special VAT invoice has been verified, a copy of the invoice duplicate of the special VAT invoice can be used to apply for the export tax refund.

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. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

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.

Related Reading

The China Tax Guide (Fifth Edition)
This popular book, fully updated with all recent tax changes and amendments, details all taxes in China affecting businesses and individuals, how to calculate the amounts due, tax registration and filing procedures, tax minimization techniques, and claiming VAT rebates. It also details good financial management techniques, handling negotiations with the tax bureau and annual audit and compliance procedures.

Foreign-Trade Enterprises Can Still Apply for Input VAT Credit Certificates

China’s SAT Issues Measures for Claiming Zero-Rated VAT

Following Shanghai, Beijing to Roll out VAT Reform in July 2012

Shanghai Offers Fiscal Support to Promote VAT Reform

China Specifies Services Eligible for Zero VAT Rate and VAT Exemption

Beijing Applies for Implementation of VAT Reform Pilot Project

China’s VAT Reform: General Taxpayer Status and Tax Filing Issues