According to the Provisional Regulations on Value-added Tax of the People's Republic of China and the State of China and the Implementing Rules, the Provisional Regulations on Business Tax of the People's Republic of China and the Implementing Rules, the Circular of the Ministry of Finance and the State Administration of Taxation on Temporarily Exempting Some Small and Micro-enterprises from the Collection of Value-added Tax and Business Tax (Cai Shui [2013] No. No. 52), and Circular of the Ministry of Finance and State Administration of Taxation on Further Supporting the VAT and Business Tax Policies for Small and Micro Enterprises (Cai Shui [2014] No. 71), hereby announce the issues related to the exemption of small and micro enterprises from the levy of value-added tax (VAT) and business tax as follows:
One, VAT small taxpayers and business taxpayers with a monthly sales or turnover of not more than 30,000 yuan (30,000 yuan included, the same hereinafter) are exempted from the levy of VAT or business tax in accordance with the the provisions of the above documents are exempted from VAT or business tax. Among them, small-scale VAT payers and business taxpayers with a quarterly tax period and quarterly sales or turnover not exceeding 90,000 yuan shall be exempted from VAT or business tax in accordance with the provisions of the above documents.
II. Small-scale VAT taxpayers who also operate business taxable items shall separately account for the sales of VAT taxable items and the turnover of business taxable items, and are exempted from VAT if the monthly sales do not exceed 30,000 yuan (90,000 yuan for quarterly taxation); and are exempted from business tax if the monthly turnover does not exceed 30,000 yuan (90,000 yuan for quarterly taxation).
Third, small-scale VAT payers with monthly sales not exceeding 30,000 yuan (90,000 yuan taxable on a quarterly basis) may apply to the competent tax authorities for a refund of the tax already paid for the issuance of VAT special invoices (including VAT special invoices for the transportation of goods) during the current period after the special invoices have been recovered in all the joints or after the special invoices have been issued in red according to the regulations.
Fourth, this announcement shall come into force on October 1, 2014. The Announcement of the State Administration of Taxation on Issues Relating to the Policies of Temporarily Exempting Some Small and Micro Enterprises from the Collection of Value-added Tax and Business Tax (Announcement of the State Administration of Taxation No. 49 of 2013) and the Reply of the State Administration of Taxation on Issues Relating to the Adjustment of the Starting Point of Value-added Tax (Guoshuikan [2003] No. 1396) are also repealed.
This announcement is hereby made.
Related Policies--
Secretariat of State Administration of Taxation Announcement No. 58 of 2014 Announcement of the State Administration of Taxation on Matters Relating to the Adjustment of Value-added Tax Returns
Interpretation of the Announcement of the State Administration of Taxation on Issues Relating to the Exemption of Small and Micro Enterprises from the Exemption of Value-added Tax and Business Tax
October 16, 2014 General Office of the State Administration of Taxation
I. Relevant Background
On September 17, 2014, the State Council held an executive meeting and decided to further support the development of small and micro enterprises. In order to implement the spirit of the State Council meeting, the Bureau, together with the Ministry of Finance, jointly issued the Circular on the Policies for Further Supporting Small and Micro Enterprises on Value-added Tax and Business Tax (Cai Shui 〔2014〕 No. 71), which specifies that from October 1, 2014 to December 31, 2015, small-scale taxpayers of value-added tax (VAT) with a monthly sales volume of 20,000 yuan to 30,000 yuan and taxpayers of business tax are exempted from the value-added tax (VAT) or business tax (BT).
In order to facilitate the implementation of the policy of exempting small and micro enterprises from VAT and business tax, the State Administration of Taxation (SAT) issued the Announcement of the State Administration of Taxation on Issues Relating to the Exemption of Small and Micro Enterprises from VAT and Business Tax to clarify the related matters in respect of the issues of quarterly payment of tax, concurrent operation of different taxable items, and issuance of special invoices.
Second, the main content of the announcement
First, it clarifies how to determine the exempted sales and turnover for taxpayers who pay taxes for a quarter. The finance and tax documents stipulate the sales or turnover of small and micro-enterprises to enjoy the exemption of VAT and business tax by month, such as: Notice of the Ministry of Finance and State Administration of Taxation on the Temporary Exemption of Part of Small and Micro-Enterprises from the Collection of Value-Added Tax and Business Tax (Cai Shui [2013] No. 52), which specifies that enterprises and non-enterprise units with a monthly sales of less than 20,000 yuan are exempted from the tax; and the newly introduced Cai Shui [2014] No. 71, which specifies that small-scale VAT enterprises with a monthly sales between 20,000 yuan and 30,000 yuan are exempted from the VAT. The new CaiShui [2014] No. 71 clarifies that VAT small-scale taxpayers and business taxpayers (including individual industrial and commercial households, other individuals, enterprises and non-enterprise units) with sales of 20,000 to 30,000 yuan are exempted from tax. In line with the principle of reducing the tax burden of small and medium-sized enterprises, the announcement makes it clear that for taxpayers who file quarterly returns, quarterly sales or turnover does not exceed 90,000 yuan (including 90,000 yuan), exempted from value-added tax or business tax.
Secondly, it clarifies the calculation of tax exemption for different taxable items. Taxpayers with both VAT taxable items and business tax taxable items belong to both VAT taxpayers and business taxpayers. In order to support the development of small and micro-enterprises, the announcement makes it clear that taxpayers account for the sales of VAT taxable items and turnover of business tax taxable items, respectively, to enjoy the preferential policies of exempting monthly sales of up to 30,000 yuan (90,000 yuan quarterly) from the levy of VAT and monthly turnover of up to 30,000 yuan (90,000 yuan quarterly) from the levy of business tax.
Third, it clarifies the issues related to invoicing. In order to maximize support for the development of small and medium-sized enterprises, the announcement makes it clear that small-scale VAT taxpayers can apply to the competent tax authorities for a refund of the tax paid on behalf of the VAT invoices, after all the VAT invoices have been recovered or red special invoices have been issued in accordance with the provisions of the VAT invoices.
Preferential Policies on Income Tax for Small and Micro-Enterprises -
Cai Shui [2014] No. 34 Notice of the Ministry of Finance and the State Administration of Taxation on Issues Relating to Preferential Policies on Income Tax for Small and Micro-Enterprises
Secretariat of State Administration of Taxation Announcement No. 23 of 2014 on the Expansion of the Preferential Policies for Small and Announcement of the State Administration of Taxation on Issues Related to Expanding the Scope of Half-Level Enterprise Income Tax for Small and Micro-profit Enterprises
Policy Interpretation - The person in charge of Taxation Department of the Ministry of Finance and the Income Tax Department of the State Administration of Taxation answered the reporter's questions on the preferential policy of half-level enterprise income tax for small and micro-profit enterprises
Accounting Processing- -Accounting Treatment of Income Tax Preferences for Small and Micro Enterprises <Sun Hongwei> Caihui [2013] No. 24: Accounting Treatment of Small and Micro Enterprises Exempted from Value-added Tax and Business Tax
Related Policies--
Nine Tax Preferences for Small and Micro Enterprises' Repayment of the Small and Micro Enterprises Small Tips on Issues Related to Enterprise Income Tax Returns for Micro-profit Enterprises
Notice on the Issuance of Provisions on the Classification Standards for Small and Medium-sized Enterprises (Ministry of Industry and Information Technology, Lianshi Enterprise [2011] No. 300)
Impact of Caixian [2014] No. 34 on the Tax Returns for Income Taxes for Small and Micro-profit Enterprises <Xiamen State Tax > Summary of Preferential Policies on Taxation for Small and Medium-sized Micro-enterprises <Jiangsu Local Tax>
General Administration's Viewpoint - The Concept of Taxation for Small and Micro Enterprises Includes Three Criteria The General Administration's Online Interpretation of Preferential Policies on Income Tax for Small and Micro-Enterprises
Subsequent Preferences - Cai Shui [2014] No. 71 Ministry of Finance Circular of the State Administration of Taxation on Further Supporting VAT and Business Tax Policies for Small and Micro Enterprises