China’s SAT Issues FAQs Relating to Tax Payments: Part III

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Nov. 30 – China’s State Administration of Taxation (SAT) issued another set of frequently asked questions relating to tax payments on November 27, 2012. The answers provided are based on existing regulations. Detailed information can be found below.

Q: When and how should foreign trade enterprises file for tax exemption, deduction and rebate?

A: According to the SAT, for goods exported by enterprises in the current month, enterprises shall declare to the competent tax authorities for payment of value added tax (VAT) within the declaration period for payment of VAT in the following month.

The enterprises shall – within each VAT declaration period from the next month following the day of declaration for goods export to April 30 of the next year – collect all relevant certificates and file the application with the competent tax authorities for exemption, deduction or rebate of VAT on exported goods.

Q: When will the obligation to pay the consumption tax for advanced payments received arise?

(In other words: Where the manufactured products adopt the settlement form of advanced payments as prescribed in the manufacturing and sales contract entered into between an enterprise and its client, when will the obligation to pay the consumption tax for the advance payment arise?)

A: In the event of adopting the settlement form of advance payment, the time at which an obligation to pay tax arises shall be the date on which the taxable consumer goods are delivered.

Q: Should invoices issued by rare earth enterprises be included under the anti-counterfeit control system of VAT invoices?

A: From June 1, 2012, rare earth enterprises must issue special and general VAT invoices through the anti-counterfeit control system of VAT invoices.

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