Q：
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What’s the scope of the taxpayers in production and living service industries referred to in the Value-added tax additional deduction policy?
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A：
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The taxpayers in production and living service industries mentioned in the policy refer to taxpayers whose sales of postal service, telecommunications service, modern service and living service account for more than 50% of total sales.
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Q：
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Is the policy applicable to a small-scale taxpayer who provided four services accounted for more than 50% of total sales?
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A:
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No. Taxpayers in the announcement refer to VAT general taxpayers, and additional deductive amount is calculated on the basis of 10% of input VAT amount in current period, only general taxpayers can apply for the policy.
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Q：
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If tax payable is equal to zero before deduction, is there any effect on additional deduction in current period for taxpayers who apply for the policy?
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A：
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Article 7 (3) of Announcement 39 stipulates that taxpayer who applies for the additional deduction policy, if tax payable is zero before deduction, the additional deduction amount for current period can be carried forward to next period. Therefore, the additional deduction amount will not affect the remaining tax deduction amount at the end of the period.
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Q：
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If companies meet the requirements of the VAT additional deduction policy. Do they need to go through archival filing procedures with local tax authority before they enjoy the policy?
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A：
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No filing procedures are required. If taxpayers are available for the deduction policy, they can submit the application for "Declaration of the Applicable Additional Deduction Policy" through Tax Bureau online system or go to Tax Bureau office. They can enjoy the policy after the application has been approved in current year.
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Q：
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If the input tax amount accrued additional deduction amount in previous period need to be transferred out, when should the additional deduction amount be adjusted?
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A：
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According to Article 7(2) of Announcement 39, if the input tax accrued additional deduction amount need to be transferred out, taxpayers should adjust the additional deduction amount accordingly when deductible input tax is transferred out.
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FAQ
