After the camp reform increase from May 1, 2018, the tax rate of engineering invoice is 10%, and the Notice on the Pilot Policies of Camp Reform and Increase of Construction Services, etc. stipulates that if there is no qualification for the sale of construction materials on the industrial and commercial business license of a construction enterprise and there is only a qualification for construction services, the invoicing and tax treatment of the outsourced materials and labor services of a construction enterprise are as follows:
Firstly. Generally speaking, the construction enterprise will charge VAT at the rate of 10% on the outsourced materials and construction labor together, and issue a 10% VAT invoice to the contractor.
Secondly, for construction enterprises of steel structure installation, electromechanical installation, fire protection engineering installation, intelligent system integration installation project and assembly building installation, if the amount of equipment in the contract for contracted materials will account for more than 70% of the contract value, a 16% VAT invoice shall be issued to the contracting party; and the portion of the construction labor services will be subject to VAT at the rate of 10%, and a 10% VAT invoice.
Secondly, if the industrial and commercial business license of the construction enterprise has both sales qualification and construction service qualification, the tax treatment and invoicing of the materials and labor services purchased by the construction enterprise will be handled in accordance with the following methods:
Thirdly, if the sales of materials exceeds 50% of the total income from the sale of materials and the sale of labor services of a year, the materials and labor services purchased by the construction enterprise will be together are subject to VAT at the rate of 16%, and a 16% VAT invoice is issued to the contractor.
Fourthly, if the sales of materials are less than 50% of the total income from the sale of materials and the sale of labor in a year, the construction company will charge VAT at a rate of 10% on the purchased materials and labor together, and issue a VAT invoice of 10% to the contractor.
Additionally, if the following conditions are met, the company can choose to apply the simplified tax calculation method and calculate the tax according to the tax rate of 3%:
Firstly, general taxpayers can choose to apply the simplified tax calculation method to the construction services provided in the form of contract labor. The provision of construction services in the form of clear contract work refers to construction services in which the constructor does not purchase the materials required for the construction work or only purchases auxiliary materials and receives labor, management or other fees.
Secondly, general taxpayers can choose to apply the simplified tax calculation method for the construction services provided for A-supplied works. A-supplied projects refer to construction projects in which all or part of the equipment, materials and power are procured by the project contractor itself.
Thirdly, general taxpayers can choose to apply the simplified tax calculation method for the construction services provided for the old projects of construction works.
Extended Information:
On March 5, 2019, the second session of the 13th National People's Congress opened in Beijing. The Premier clearly pointed out when making the Government Work Report:
Deepen the value-added tax (VAT) reform, and this year reduce the current 16% tax rate to 13% for manufacturing and other industries, and reduce the current 10% tax rate to 9% for transportation, construction and other industries; and keep the tax rate unchanged at 6% for the first tax bracket, but ensure that the tax burden of all industries is only The tax burden of all industries will only be reduced but not increased.
Tax obligations occurring after April 1, 2019 (inclusive) will be invoiced according to the new tax rate. Contracts signed before March 31, 2019 (inclusive) will be invoiced at the original tax rate. Contracts signed on or after April 1, 2019, are invoiced at the new tax rate.
Secretariat of State Administration of Taxation - Circular on Pilot Policies for the Conversion of Construction Services, etc.
Secretariat of State Administration of Taxation - Circular on the Adjustment of VAT Rates
Chinese People's **** and the Central People's Government of the People's Republic of China - Report on the Work of the Government