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Announcement of the State Taxation Administration on Tax Administration Matters Relating to the Exem2022-03-24 18:58:59

Announcement of the State Taxation Administration on Tax Administration Matters Relating to the Exemption of Value-added Tax for Small-scale Taxpayers and Others

Announcement of the State Taxation Administration [2022] No. 6

March 24, 2022


To thoroughly implement the major decisions and arrangements of the CPC Central Committee and the State Council on the implementation of a new set of tax and fee policies, and to further support the development of small and micro enterprises, the following tax administration matters are hereby announced according to the Announcement of the Ministry of Finance and the State Taxation Administration on Exempting Small-scale VAT Taxpayers from Value-added Tax ([2022] No. 15):

I. Small-scale VAT taxpayers, whose taxable sales income subject to 3% levy rate is exempt from VAT, shall issue ordinary tax-exemption invoices as required. Taxpayers who choose to waive tax exemption and issue special VAT invoices shall issue special VAT invoices with a levy rate of 3%.

II. Where a small-scale VAT taxpayer has obtained taxable sales income and the tax liability occurs before March 31, 2022, and it has issued VAT invoice at the levy rate of 3% or 1%, a red-letter invoice needs to be issued for the occurrence of sales discounts, suspension or refunds, it shall issue the red-letter invoice according to the corresponding levy rate; in case the invoice is incorrect and needs to be re-issued, it shall issue a red-letter invoice according to the corresponding levy rate, and then issue a correct blue-letter invoice anew.

III. Where the taxable sales of a small-scale VAT taxpayer do not exceed a total monthly amount of CNY150,000 (or a quarterly amount of CNY450,000 if the applicable taxable period is quarterly, the same below), it shall enter the items such as VAT-exemption sales into the corresponding column "tax-exempt sales of small and micro enterprises" or "sales below the threshold" of the Declaration Form for Value-added Tax and Surcharges (Applicable to Small-scale Taxpayers).
If the total monthly amount of sales exceeds CNY150,000, it shall enter the total sales exempted from VAT and other items into the "other tax-exempt sales" column of the Declaration Form for Value-added Tax and Surcharges (Applicable to Small-scale Taxpayers), as well as in the corresponding column of the Schedule of Value-added Tax Reductions and Exemptions Declaration.

IV. For a taxpayer who has changed its tax registration status as a small-scale taxpayer pursuant to Article 2 of the Circular of the Ministry of Finance and the State Taxation Administration on Unifying the Criteria for Small-scale VAT Taxpayers (Cai Shui [2018] No.33), Article 5 of the Announcement of the State Taxation Administration on Tax Collection and Administration Issues related to the VAT Exemption Policies for Small-scale Taxpayers ([2019] No. 4), and Article 6 of the Announcement of the State Taxation Administration on Several Issues concerning the Collection and Administration of Value-added Tax for the Distribution of Used Vehicles and Others ([2020] No.9), the balance as of March 31 accounted in the title "tax payable - input tax to be deducted", pursuant to the relevant provisions of the Announcement of the State Taxation Administration on Several Value-added Tax Issues Related to Harmonization of the Criteria for Small-scale Taxpayers ([2018] No. 18), can be accounted in fixed assets, intangible assets, investment assets, inventories, and other related titles in 2022, and will be deducted before enterprise income tax or individual income tax according to regulations, and the depreciation and amortization that have been previously deducted before tax will no longer be adjusted; for the part that cannot be divided, it can be deducted before enterprise income tax or individual income tax at one time in 2022.

V. Small-scale taxpayers who have already used a special tax control device such as a Golden Tax USB disk or Tax Control USB disk to issue VAT invoices may continue to use the existing device to issue VAT invoices or may, on a voluntary basis, exchange it with tax authorities free of charge, for a Tax Ukey to issue VAT invoices.

VI. The Announcement shall come into force on April 1, 2022.

The Announcement is hereby made.