The three-in-one principle specifically includes that "goods, labor and taxable services flow", "capital flow" and "invoice flow" must all be the same payer, emphasizing "the same payer".
The reason why we should abide by the three-in-one principle is to improve the authenticity and reliability of invoices. Value-added tax invoices have always had a great impact on tax revenue, and the three-way integration is to avoid violations and tax evasion.
Value-added tax is a turnover tax based on the value-added amount of goods (including taxable services) generated in the circulation process. From the tax principle, value-added tax is a turnover tax levied on the added value of many links such as commodity production, circulation and labor services or the added value of commodities. Extra-price tax is implemented, that is, it is borne by consumers, and tax is levied only if there is value added, and tax is not levied if there is no value added.
Value-added tax is a tax levied on the value-added of units and individuals who sell goods or provide processing, repair and replacement services and import goods. Value-added tax has become one of the most important taxes in China, accounting for more than 60% of all taxes in China, and it is the largest tax. Value-added tax is collected by the State Taxation Bureau, and 50% of the tax revenue comes from the central government and 50% from local governments.
In practice, it is difficult to accurately calculate the added value or additional value of commodities in the process of production and circulation. Therefore, China also adopts the method of tax deduction, which is a widely used method in the world. That is, according to the sales of goods or services, the sales tax is calculated at the prescribed tax rate, and then the value-added tax paid when obtaining goods or services is deducted, that is, the input tax, and the difference is the taxable amount of the value-added part. This calculation method embodies the principle of taxation according to value-added factors.
"Provisional Regulations on Value-added Tax in People's Republic of China (PRC)" Article 8 The value-added tax paid or borne by taxpayers for purchasing goods, labor services, services, intangible assets and real estate is the input tax.
The following input taxes are allowed to be deducted from the output tax:
(1) VAT indicated on the special VAT invoice obtained from the seller.
(2) The value-added tax indicated in the special payment book for customs import value-added tax obtained from the customs.
(3) For purchasing agricultural products, except for obtaining special VAT invoices or customs import VAT payment letters, the input tax shall be calculated according to the purchase price of agricultural products and the deduction rate 1 1% indicated in the purchase invoices or sales invoices of agricultural products, unless otherwise stipulated by the State Council. Input tax calculation formula:
Input tax = purchase price multiplied by deduction rate
(4) Value-added tax indicated on the tax payment certificate for withholding and remitting taxes obtained from tax authorities or withholding agents when purchasing labor services, services, intangible assets or domestic real estate from overseas units or individuals.
The adjustment of deduction items and deduction rate shall be decided by the State Council.