VAT Tax Preferences for Small Taxpayers
I. Tax-free Sales Limit
Small VAT taxpayers with monthly sales not exceeding 30,000 yuan (including 30,000 yuan, the same hereinafter) are exempted from value-added tax (VAT) in accordance with the provisions of the above documents. Among them, small-scale VAT taxpayers with a tax period of one quarter and quarterly sales not exceeding 90,000 yuan shall be exempted from VAT in accordance with the provisions of the above document. (See: Announcement of the State Administration of Taxation No. 57 of 2014)
II. Changes in the Scope of VAT Exemption after the Reform and Increase of the Taxation System
Small-sized taxpayers with VAT sales of goods, provision of processing, repairing and repairing labor services with monthly sales of not more than 30,000 yuan (90,000 yuan taxable on a quarterly basis), and sales of services and intangible assets with monthly sales of not more than 30,000 yuan (90,000 yuan taxable on a quarterly basis) are entitled to exemption of VAT from the period from May 1, 2016 to December 31, 2017, they can enjoy the preferential policy of temporary exemption of value-added tax for small and micro enterprises, respectively.
Small-scale taxpayers of VAT shall separately account for the sales of goods, the sales of processing, repair and fitting services, and the sales of services and intangible assets. If the sales are not separately accounted for and the total sales exceed the prescribed limit, they are not entitled to the tax exemption.
Other individuals who rent out real estate in the form of advance receipts and obtain advance rental income, which can be equally apportioned over the lease period corresponding to the advance receipts, and whose monthly rental income after apportionment does not exceed RMB 30,000, can enjoy the preferential policies on VAT exemption for small and micro enterprises. (See: Announcement of the State Administration of Taxation No. 23 of 2016)
Three, how the sales limit applies
Sales are tax-exclusive amounts, and for small-scale VAT payers that file quarterly tax returns, if the actual operating period is less than a quarter, the actual operating month shall be used to calculate the sales amount for the current period that can enjoy the policy of exempting VAT for small and micro enterprises.
4. Relationship between issuing special invoices on behalf of taxpayers and VAT exemption
1. Small-scale VAT taxpayers who need to apply for issuing special invoices for VAT on behalf of taxpayers shall prepay VAT in accordance with the regulations at the same time.
2. The sales deduction for small-scale taxpayers includes the sales of special VAT invoices and ordinary invoices issued on behalf of taxpayers.
3. If the monthly sales of a small-scale VAT payer do not exceed 30,000 yuan (90,000 yuan for quarterly tax), the tax already paid for the current period due to the issuance of special VAT invoices (including special VAT invoices for the transportation of goods) can be applied for a refund from the competent tax authorities after the special invoices are all recovered in a single issue or after the special invoices in red characters are issued in accordance with the regulations.
Expanded Information:
VAT is a kind of turnover tax levied on the basis of value-added amount generated in the process of circulation of commodities (including taxable labor services). In terms of the principle of tax calculation, VAT is a turnover tax levied on the new value added or the added value of commodities in multiple stages of commodity production, circulation and labor services. It is an out-of-the-money tax, that is, it is borne by consumers, and it is levied only when there is value added, but not when there is no value added.
VAT is a tax on the value-added amount realized by units and individuals who sell goods or provide processing, repair and fitting services and import goods. VAT has become one of the most important taxes in China, with VAT revenue accounting for more than 60% of all tax revenue in China, making it the largest tax. VAT is collected by the State Administration of Taxation (SAT), and 50% of the tax revenue is from the central government and 50% from local governments. VAT on imports is collected by the Customs Department, with all tax revenues going to the central government.
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