New Regulations for VAT General Taxpayers

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Apr. 2 – To help manage the qualification of general taxpayers status for the payment of value-added taxes, the State Administration of Taxation recently issued a new management approach effective March 20, 2010.

It stipulates that if VAT taxpayers’ annual taxable sales pass the level of the small-scale taxpayer set by the Ministry of Finance, they shall apply to the tax authorities for the general taxpayer qualification.

With the exception of business individuals, non-enterprise units that choose to pay tax on a small-scale level will be denied their application for general taxpayer status by the tax authorities. If a taxpayers’ annual taxable sales do not exceed the level for small-scale taxpayers set by the Ministry of Finance and the SAT, they may apply for the general taxpayer status with tax authorities.

Tax authorities will approve the general taxpayer qualification for taxpayers who have fixed production or operation sites, comply with the standard national accounting regulations, and can provide accurate complete tax records.

Furthermore, taxpayers who have obtained the general taxpayer qualification shall calculate taxes and use VAT invoices from the second month onwards, in accordance with the “Provisional Regulations of the PRC VAT,” Article 4.

Taxpayers who have been confirmed as general taxpayers can not be converted to small-scale taxpayers.

Related Reading
The China Tax Guide (Fourth Edition), updated for 2010