Legal analysis: The tax credit refund, which is called "VAT tax credit refund preference", is to refund the full amount of VAT in advance to the "input" VAT which cannot be deducted now and can be deducted only in the future. It is a full refund of the "input" VAT that can't be deducted now and can only be deducted in the future.
Legal basis: According to Article 8 of the Announcement on Relevant Policies on Deepening Value-added Tax Reform, since April 1, 2019, the system of refunding VAT tax credit at the end of the period will be implemented on a trial basis. (a) Taxpayers who also meet the following conditions may apply to the competent tax authorities for refund of incremental tax credit: 1. the incremental tax credit is greater than zero for six consecutive months (or two consecutive quarters in case of quarterly tax payment) starting from the tax belonging to the tax period of April 2019 and the incremental tax credit is not less than 500,000 yuan in the sixth month; 2. the tax credit rating is Grade A or Grade B; 3. the tax credit rating is Grade A or Grade B; and 3. the tax credit credit credit has not been refunded for the 36 months prior to the application for refund Fraudulent tax credit refund, export tax refund or false VAT invoice issuance; 4. Not punished by tax authorities twice or more for tax evasion in the 36 months before applying for tax refund; 5. Not enjoying the policy of instant tax refund and first levy and then refund (rebate) from April 1, 2019 onwards. (ii) The incremental tax credit referred to in this announcement refers to the newly increased tax credit at the end of the period compared to the end of March 2019 (iii) The incremental tax credit allowed to be refunded by a taxpayer for the current period shall be calculated in accordance with the following formula: the incremental tax credit allowed to be refunded = the incremental tax credit × the ratio of input composition × 60% of the ratio of input composition, for the VAT invoices (including tax-controlled motor vehicle sales uniform invoices), the customs import VAT special payment book, and the unloading of tax that have been credited in the period of the tax belonging to the period between April 2019 and the period prior to applying for tax refund The proportion of the VAT amount stated in the tax payment vouchers to the total offset input tax amount in the same period. (d) Taxpayers shall apply to the competent tax authorities for refund of tax credits within the VAT declaration period. (e) If a taxpayer exports goods and services and engages in cross-border taxable acts and applies the tax exemption and tax rebate scheme, after applying for the tax exemption and tax rebate, the taxpayer may apply for refund of tax credit if the conditions stipulated in this announcement are still met; if the tax exemption and tax rebate scheme is applied, the relevant input tax amount shall not be used for refund of tax credit. (vi) After the taxpayer obtains the refunded tax credit, the tax credit for the current period shall be reduced accordingly. If the conditions for tax refund are met again in accordance with the provisions of this Article, the taxpayer may continue to apply to the competent tax authorities for refund of tax credits, but the consecutive periods stipulated in point 1 of item (a) of this Article shall not be calculated repeatedly. (vii) If the tax credit refund is fraudulently obtained by means of false enhancement of items, false declaration or other deceptive means, the tax authorities shall recover the fraudulently obtained tax refund and deal with the matter in accordance with the relevant provisions of the Law of the People's Republic of China on Administration of Taxation Collection and Collection of Taxes and the other relevant provisions of the Law of the People's Republic of China. (viii) the refund of the incremental tax credits central and local sharing mechanism to be announced.
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