According to Article 8 of the Provisional Regulations on Value-added Tax (VAT), the amount of VAT paid or borne by a taxpayer on the purchase of goods or the acceptance of taxable services (hereinafter referred to as the purchase of goods or the acceptance of taxable services) shall be the amount of input tax. The following input tax is allowed to be deducted from output tax:? (c) Purchase of agricultural products, in addition to obtaining special VAT invoices or customs import VAT payment book, according to the purchase price of agricultural products as stated in the purchase invoice or sales invoice and the 13% deduction rate of input tax. Input tax calculation formula:? Input tax = purchase price × deduction rate? Therefore, the purchase of tax-free agricultural products can be deducted input tax.
Taxpayers selling VAT-exempted goods are not allowed to issue VAT invoices, and the input tax credit is based on the amount of tax stated on the VAT invoice. Due to the sale of VAT-exempted goods, the purchaser cannot obtain the VAT special invoice, and of course cannot offset the VAT.
What are the VAT exemptions?
1. The old provisional regulations on VAT provide for tax-exempt income items
According to Article 15 of the Provisional Regulations on Value-added Tax of the People's Republic of China, the following items are exempted from VAT:
The following items are exempted from VAT:
(1) Agricultural products are exempted from VAT, while the following items are exempted from VAT. (i) Self-produced agricultural products sold by agricultural producers;? (ii) Contraceptive drugs and appliances;? (C) antique books;? (iv) Imported instruments and equipment directly used for scientific research, scientific experiments and teaching;? (v) imported materials and equipment provided by foreign governments and international organizations as non-reimbursable assistance;? (F) directly imported by organizations of persons with disabilities for the exclusive use of persons with disabilities;? (vii) Sales of articles used by oneself.
2. Tax-exempt Income Items Increased after the Reform of Business Taxes
According to Annex 3 of Caixin 2016 No. 36, "Annex 3: Provisions on Transitional Policies for the Pilot Program of Business Tax Conversion to Value-added Tax":
Nursery and Education Services, Elderly Care, Funeral and Burial Services, Marriage Referral Services, Healthcare Services, Agricultural-Related Services, Income from Admission Tickets of Cultural Venues and Religious Institutions, Special Interest income, income from the transfer of special financial commodities, technology transfer (technology development, technology services), etc.***There are 40 items of tax-exempted income. (For details, please refer to Document No. 36. Detailed description is abbreviated)
3. Other special VAT-exempt incomes
A series of VAT-exempt incomes involving VAT, such as those released during the recent epidemic period, belong to the VAT-exempt incomes under special circumstances, such as:
"Announcement on the Relevant Tax Policies on Supporting the Prevention and Control of the Pneumonia Epidemic of Novel Coronavirus Infections" (Ministry of Finance? General Administration of Taxation Announcement No. 8 of 2020) of the document:
Three, the taxpayers transport epidemic prevention and control of key protection materials obtained income, exempted from value-added tax.
V. Taxpayers are exempted from VAT on income derived from the provision of public ****transportation services, living services, as well as the provision of express delivery and collection services of essential living materials for residents.
The Announcement on Tax Policies on Donations to Support the Prevention and Control of the Pneumonia Epidemic Infected by the New Coronavirus (Ministry of Finance? General Administration of Taxation Announcement No. 9 of 2020):
Third, units and individual industrial and commercial households will be self-produced, commissioned or purchased goods, through public welfare organizations and people's governments and their departments at or above the county level and other state organs, or directly to hospitals tasked with the prevention and control of the epidemic, gratuitous donations to combat the new coronavirus-infected pneumonia epidemic, exempted from value-added tax, consumption tax, urban maintenance and construction tax, education tax, and tax on education. The government is also exempted from the value-added tax, consumption tax, urban maintenance and construction tax, education surcharge, and local education surcharge.
The above tells the sale of tax-free medicine VAT how to deduct, we are in the VAT deductible first to calculate the input tax, VAT tax exemptions or a lot of the above are listed for you, we should be in the tax exemption income accounting should be a good understanding of the policy, the above is the whole content, thank you for reading.