Jan. 5 – On December 29, the State Administration of Taxation (SAT) issued the “Announcement on Issues Concerning the Offset of Value-added Tax (VAT) using Overdue Tax Payment Vouchers (SAT Circular  No. 78)” (the “Announcement”) to resolve the issue of the inability of general VAT payers to declare input VAT on time due to the occurrence of various objective circumstances.
According to the Announcement, taxpayers who are overdue in applying for the tax offset are permitted to apply to offset input VAT after examination and approval of tax authorities if actual transactions occurred and stipulated objective circumstances are met, and:
The VAT payment vouchers as referred to in the Announcement include VAT special invoices (including cargo transport VAT special invoices), customs special import VAT payment letters, and uniform invoices of the road and inland cargo transportation industry.
The object circumstances stipulated in the Announcement are:
The Circular is effective from January 1, 2012. Any overdue VAT payment vouchers obtained by VAT general taxpayers that are issued after January 1, 2007 and took place before the effective date of the Announcement can be used to apply for offsetting of VAT prior to June 30, 2012 in accordance with this Announcement.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises with their tax obligations. For further advice and specifics relating to VAT and tax payment vouchers, please email firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure here.
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.
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