SAT Issues Admin Measures for VAT General Taxpayers
Apr. 16 – To enhance the management for general taxpayers of value-added tax in China, the State Administration of Taxation issued “The Management Approach for VAT General Taxpayers” on April 7.
The notice, Guoshuifa  No. 40, clarifies that “small wholesale businesses” refer to enterprises with a maximum registered capital of RMB800,000 and a maximum of 10 employees, excluding enterprises which only engage within the export trade business scope and do not use VAT invoices. It is effective from March 20, 2010.
It also clarifies that if the company falls into one of the following four categories, it is classified among “other general taxpayers.”
- VAT evasion is more than 10 percent of the tax payment and is over RMB100,000
- Defraud export tax refund
- Defraud VAT deduction certificate
- Under new regulations by the SAT
The tax counseling period shall be three months for the newly confirmed small wholesale enterprises as general taxpayers, and six months for other general taxpayers.
Tax authorities should provide general guidance for the newly established small wholesale enterprises; the “General Tax Management Approach” (GTMA) should be produced and delivered to the enterprises, effective since the implementation month. For the other general taxpayers, the GTMA should be delivered within 40 working days after tax authorities issue the tax inspection and settlement, effective from the second month.
According to the notice, tax deductions can be processed if the VAT invoices correctly match up with the import VAT document from the customs and transportation payments.
The notice also listed the detailed requirements for the management of VAT taxpayer invoice, tax payment accounting and filling out standards for the VAT general taxpayer application.
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