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Q：
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Our company is a small-scale taxpayer with annual sales volume below 5 million. We intend to bid for a project recently, yet only general taxpayers are eligible to participate in the bidding. Could our company apply to convert to a general taxpayer prior to the bidding?
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A：
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Yes. Provided that the accounting system is sound and accurate tax information can be furnished, the company may complete the registration as a general taxpayer.
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Then, after voluntarily applying to convert to a general taxpayer, when will the status take effect?
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A：
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Where registration as a general taxpayer is completed when the annual taxable sales volume for value-added tax does not exceed the prescribed threshold, the effective date of general taxpayer status shall be the first day of the current period when the registration is processed.
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Q：
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What tax-related risks will arise after registering as a general VAT taxpayer?
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A：
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There may be risks such as obtaining falsely issued special VAT invoices for input tax deduction; receiving payments through personal accounts, concealing income, and failing to declare non-invoiced income; and incorrect application of tax rates.
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Q：
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If mistakes made by our company’s employees in tax matters which trigger tax-related risks, what consequences will have?
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A：
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To prevent tax-related risks, you may engage professional accounting and taxation institutions like Kaizen in advance to handle the company’s accounting and taxation matters on an agency basis.
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Q：
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After registering as a general VAT taxpayer, if business volume declines, can the enterprise convert back to small-scale taxpayer status?
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A：
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No. Once a taxpayer is registered as a general taxpayer, it shall not be converted to a small-scale taxpayer.
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