Article 1
These Implementation Rules are formulated in accordance with the Interim Regulations on Value-added Tax of the People’s Republic of China.
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Article 2
Units and individuals engaged in the sale of goods, provision of processing, repair or replacement services, sale of services, transfer of intangible assets, or sale of immovable properties within the territory of the People’s Republic of China shall be taxpayers of value-added tax and shall pay value-added tax in accordance with the provisions of the Interim Regulations on Value-added Tax and these Implementation Rules.
Article 3
The sale of goods refers to the transfer of ownership of goods for consideration.
The provision of processing, repair and replacement services refers to the services of processing, repair or replacement provided for consideration.
Article 4
The sale of services, transfer of intangible assets and sale of immovable properties shall be subject to value-added tax in accordance with the relevant provisions of the Interim Regulations on Value-added Tax and these Implementation Rules.
Article 5
Taxable sales amount refers to the total consideration and other charges received by a taxpayer from taxable activities, excluding value-added tax.
Article 6
Where the price is obviously low without justified reasons, or where the taxable sales amount cannot be determined, the competent tax authorities shall determine the taxable sales amount in accordance with the methods prescribed by the tax authorities under the State Council.
Article 7
The value-added tax payable shall be the balance of the output tax for the current period after deducting the input tax for the current period.
Article 8
Input tax refers to the value-added tax paid or borne by a taxpayer in purchasing goods, services, intangible assets or immovable properties.
Article 9
The input tax of the following items shall not be deducted from the output tax:
(1) goods or taxable services used for simple taxation methods, tax-exempt items, collective welfare or personal consumption;
(2) abnormal losses of purchased goods and the related taxable services;
(3) abnormal losses of products in process or finished products that consume purchased goods or taxable services;
(4) other items as prescribed by the competent tax authorities under the State Council.
Article 10
Value-added tax shall be collected and administered by the tax authorities in accordance with the law.
Article 11
Taxpayers shall truthfully issue value-added tax invoices and use such invoices in accordance with the relevant provisions on invoice administration.
Disclaimer: The regulation of company registration in China is translated by FDIChina for reference only. There may be different interpretations of the Chinese version.