Notice Of The Ministry Of Finance And The State Administration Of Taxation On The Value Added Tax Policy Of Embedded Software

The departments of finance, bureaux and State Administration of Taxation of all provinces, autonomous regions, municipalities directly under the central government and cities under separate planning shall be the financial bureaus of the Xinjiang production and Construction Corps.

In order to better implement the software value-added tax preferential policies and promote the development of the software industry, according to the situation reflected by various localities, the research on embedded software VAT policy is as follows:

I. General Taxpayers of value-added tax sell their own embedded software developed and produced along with computer networks, computer hardware and machinery equipment. If we can, in accordance with the provisions of the first third paragraphs of the Ministry of Finance and the State Administration of Taxation on the implementation of the first paragraph of the first section of the circular No. [1999]273 of the Central Committee of the CPC and the State Council on the strengthening of technological innovation, the development of high technology, and the decision to achieve industrialization, the sales of embedded software and computer hardware, machinery and equipment, etc., we can enjoy preferential policies for value-added tax of software products.

Those who can not calculate the sales amount separately shall still not refund the tax in accordance with the first paragraph of the eleventh article of the Ministry of Finance and the State Administration of Taxation on the value added tax policy (fiscal and taxation [2005]165).

Two, taxpayers calculate the sales volume of embedded software according to the following formula

Embedded software sales = embedded software and computer hardware, machinery and equipment sales total - [computer hardware, machine equipment cost * (1+ cost profit margin)]

The cost in the above formula refers to the actual production (or procurement) cost of the computer hardware and machine equipment sold for sale (or purchased).

The cost profit rate refers to the cost profit rate of the computer hardware and machine equipment sold by taxpayers, and the actual cost profit rate is higher than 10%. According to the actual cost profit rate, the rate of less than 10% is determined by 10%.

Three, the tax authorities should calculate the levy and refund amount of the embedded software according to the following formula and handle the tax refund.

Tax rebate = embedded software sales * 17%- embedded software sales * 3%

Four, the tax authorities should regularly check the cost of production (or procurement) of taxpayers, and check whether taxpayers actually check the cost and profit.

For the unreasonable sales of software sales, high cost or profit, it should be corrected in time. The suspected tax fraud should be handed over to the tax inspection department.

Five. This notice is implemented from the date of promulgation of the notice of the Ministry of finance of the State Administration of Taxation on certain policies on value added tax (fiscal and taxation [2005]165).

The notifications of the State Administration of finance of the Ministry of Finance on the policy of value-added tax on embedded software (financial and tax [2006]174) ceased to be carried out.

Before the issuance of this notice, taxpayers selling software products comply with the requirements of this notice, and all regions shall refund tax according to the provisions of this circular.