Q:
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Does only special input value-added tax are deductible?
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A:
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According to a Notice by the Ministry of Transport, the Ministry of Finance, the State Taxation Administration and the National Archives Administration on Toll Charge E-invoice Related Issues (Notice by MoT [2020] No.24) the first section of the second article: Value-added tax general E-invoice for toll charges (“Toll E-invoice” thereinafter). Tool E-invoices include those has “toll charges” on the upper left corner and has applicable tax or taxable rate in the tax rates column, as well as, those has no “toll charges” on the upper left corner and has “no tax” in the tax rates column. Once consumer take profit-seeking public roads, the administrator shall issue the former invoice, which is deductible from output VAT payable; customer takes top-up method, the ETC provider shall issue the later invoice, which is not deductible from output VAT.
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Q:
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Is it true that for car-hailing service, only E-invoice is accepted as a voucher to deduct the stated tax from output VAT, whereas conventional general invoice cannot?
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According to a Notice by the Ministry of Finance, State Taxation Administration and General Administration of Customs about Comprehensively Deepening Value-Added Tax Reforms (MoF, STA & GAC [2019] No.39), section 1 Article 6:
6. Taxpayer consume domestic tourism transportation service, the input tax is allowed to be deducted from output VAT.
(1) Taxpayers without VAT special invoice, shall recognise input VAT for the time being as follows:
(a) Obtained VAT general invoice, the stated tax amount.
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How to use special invoice issued for purchasing agricultural products for VAT deduction?
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Agricultural products bought from small-scaled taxpayer and obtained special invoices, the input VAT deduction shall be at 9% of the amount stated. Agricultural products bought from producer, the input VAT deduction shall be at 9% of the stated purchase price.
Agricultural products bought for producing goods that are applicable to output VAT at 13%, a 1% of input VAT paid would be deductible from VAT payable in addition. That means, the practical input VAT deduction rate is 10%.
Agricultural products bought for producing and sale, and consign or entrust processing products that are applicable to output VAT at 13% or other rates, the practical input VAT should be calculated separately. If fail to do so, then enterprises shall use the invoice or customer VAT payment proof stated input VAT for deduction on taxes payable, alternative, use 9% of the purchase or sale invoices stated price.
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Q:
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How to deduct the expense made to purchase tax control device?
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According to a notice by Mof and STA on Tax Control Purposed Device and Maintenance Expense Related Value-Added Tax Issues, the first purchase of tax control device made by taxpayers after 1st December 2011, can be fully (sum of price and tax) deducted from output VAT payable, if provided with special VAT invoices. Which the deduction is allowed to be carry forward if deduction is not fully recognised. Purchases made after the first time, the taxpayer shall bear the expenses occurred, which is not deductible from VAT payable.
VAT tax control devices include: VAT anti-counterfeiting device, freight transportation service special VAT invoice control system, unified motor vehicle sales invoice tax control system and public roads, domestic river freight transportation service invoice tax control system.
VAT anti-counterfeiting device include: Gold-tax car, IC card, Card reader or Gold-tax drive and tax declare drive, freight transportation service VAT special invoice control system and device include tax control drive and tax declare drive, unified motor vehicle sales invoice tax control system and public roads, domestic river freight transportation service invoice tax control system include tax control drive and transmission drive.
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How to deduct the maintenance expense of tax control devices?
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Technical maintenance expenses paid by VAT taxpayers on and after 1st December 2011 (excluded replenish payment made for VAT payable before 30th November 2011), is fully deductible from VAT payable if supported by invoices issued by the maintenance service providers. Any unused deduction is allowed to be carry forward in later periods. The technical maintenance price shall be set with accordance to standards made by supervisory department.
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