Basic Knowledge Of Value Added Tax

Basic knowledge of value added tax

1. scope of collection and taxpayers
(1) scope of levy: goods sold in People's Republic of China or processing provided; Repair and repair Labor and imported goods.
(2) taxpayers: selling goods in People's Republic of China or providing units and individuals for processing, repairing and repairing labor and importing goods.
2. tax rate and scope of application

Value added tax rate or levy rate zero tax applicable scope export goods (except as otherwise provided by the State Council)

13% 1. grain and edible vegetable oil

2. tap water, heating, cooling, hot water, gas, liquefied petroleum gas, natural gas, biogas and household coal products.

3. books, newspapers, magazines

4. feed, fertilizer, pesticide, agricultural machinery and agricultural film

5. other goods stipulated by the State Council

17% sales and import of processing, repair and repair services and other goods other than zero tax rate and 13% tax rate.

6% small-scale taxpayers of non-commercial enterprises

4% small business enterprises (annual application for approval)
 

Three Threshold 
Amplitude of value added tax threshold
(1) the starting point for the sale of goods is monthly sales of 2000~5000 yuan.
The city is 5000 yuan.
(2) sales of taxable services shall be set at 1500~3000 yuan for monthly sales.
The city is 3000 yuan.
(3) the threshold for each tax payment is 150~200 yuan for each (day) sale and 200 yuan for the city.
Note: the application scope of VAT threshold is limited to individuals only.
4. input, sales and tax payable calculation
amount of taxes on purchases
The amount of input tax refers to the value-added tax paid or paid by taxpayers to purchase goods or accept taxable services.
(1) the input tax which is allowed to be deducted from the output tax:
1) the value added tax specified in the VAT invoice specially obtained from the seller;
2) the value added tax specified on the duty paid voucher obtained by the customs;
3) the formula for calculating the amount of tax deducted from the purchase of tax-free agricultural products, purchased waste materials and the cost of freight transportation.
Input tax = purchase price (or transport cost) * deduction rate;
4) with the approval of the State Council, from July 1, 1998, the deduction rate of the transport expenses paid by the general taxpayers of value-added tax to purchase or sell taxable goods is reduced from 10% to 7%. After July 1, 1998, the input tax on transportation cost deducted and deducted shall be calculated at 7% deduction rate regardless of the time when the transport invoice is issued and the transportation cost specified.
5) with the approval of the State Council, since January 1, 2002, the deduction rate of the tax deduction for the agricultural tax exempt agricultural products sold by the general taxpayers of value-added tax has increased from 10% to 13%.
(2) the deductible input tax:
(fourth) the purchase of fixed assets (foreign funded enterprises purchase domestic equipment tax rebates).
(2) purchase of goods or taxable services for non taxable items;
3. Goods purchased or taxable services for tax-free items;
(4) goods purchased or taxable services for collective welfare or personal consumption;
(5) the purchase of goods with abnormal losses;
Goods purchased or taxable services consumed in products and finished products that are not normally damaged.
(3) the time limit for the deduction of input tax.
1) special VAT invoices issued by the anti-counterfeiting tax control system of the general taxpayer applying for deduction shall be certified by the tax authorities within 90 days from the date of the issuance of the special invoices, otherwise they will not be deducted from the input tax; the value-added tax invoices issued by the anti-counterfeiting tax control system approved by the general taxpayer of the value-added tax shall be accounted for in the current month according to the relevant provisions of the value-added tax and declared to be deducted or deducted, otherwise the tax will not be deducted.
2) Value added tax The waste materials invoice issued by the general taxpayer after March 1, 2004 should be declared to the competent tax authorities before the end of the first tax declaration period 90 days after the date of issue.
3) the customs duty paid certificate issued by the general taxpayer of value-added tax after February 1, 2004 shall be declared to the competent tax authority before the end of the first tax filing period 90 days after the date of issue, and the tax shall not be deducted within the time limit.
4) the transport invoice issued by the general taxpayer of value added tax after October 31, 2003 shall be declared to the State Administration of taxation within 90 days from the date of the opening of the invoice, and shall not be deducted for more than 90 days.
A taxpayer who obtains all transport invoices, waste materials invoices and customs payment vouchers that need to deduct the VAT input tax shall fill in the list of VAT invoice for transport invoices, the list of deductions for waste materials invoices and the customs tax payment voucher list according to the contents of the relevant invoices or credentials, and send the relevant information to the taxpayers in addition to the list of paper materials. If the documents and electronic information are not submitted separately, the input tax shall not be deducted.
Output tax
The amount of output tax refers to the value added tax payable by taxpayers selling goods or providing taxable services, according to sales volume and value-added tax rates, and receiving goods from purchasers or taxable labor acceptor.
(1) formula:
Output tax = sales volume tax rate
If the price of taxpayers selling goods or taxable labor is obviously low, without proper reasons, the sales tax shall be approved by the competent tax authorities.
(2) sales volume for calculating output tax:
It refers to the full price and extra charges paid by the taxpayer to the buyer by selling goods or taxable services (excluding the sales tax collected).
Taxable amount
The amount of tax payable is the balance after the current production tax is deducted from the current input tax.
Formula:
Tax payable = current output tax - current input tax
As the current sales tax is less than the current tax deduction, the shortage can be carried forward and continue to be deducted.
Small scale taxpayers of value added tax shall sell the goods or taxable services, calculate the amount of tax payable according to the sales volume and the prescribed rate of levy, and shall not deduct the input tax.
Formula:
Taxable amount = sales volume * levy rate
Sales of small-scale taxpayers do not include their taxable amount. Small scale taxpayers who sell goods or taxable services adopt the combined pricing method of sales volume and tax payable, and calculate sales volume according to the following formula.
Sales = tax sales / (1 + collection rate).
5. place of tax payment
(1) fixed businesses should declare and pay taxes to the competent tax authorities where their institutions are located. Where a general organ or branch is not in the same county or municipality, it shall declare and pay tax separately to the competent tax authorities at its respective locality. With the approval of the State Administration of Taxation or its authorized tax authorities, the general organ may report to the competent tax authorities where the head office is located.
(2) if a fixed merchant sells goods to a foreign county (city), he shall apply to the competent tax authority at the place where his / her institution is located to apply for the issuance of tax administration certificate for the business activities, and declare and pay taxes to the competent tax authorities at the place where his organization is located. If a tax administration certificate issued by the competent tax authority issued by the competent tax authority at the place where the organization is not located, it sells goods or taxable services to other counties (cities), and it shall declare and pay taxes to the landlord's tax authorities. If it fails to declare the tax payment to the landlord's tax authorities, the tax authorities of the competent tax authorities where the machines are located shall levy taxes.
(3) sales of goods or taxable services by non fixed businesses shall be declared and paid to the landlord's tax authorities.
(4) imported goods shall be declared and paid by the importer or his agent to the Customs at the customs declaration place.
6. tax liability and tax payment period
The time of tax payment, sales of goods or taxable services, the date of receipt of sales funds or the receipt of claims for sales, and the date on which the imported goods are declared to be imported. Among them, the sale of goods or taxable services, according to the different ways of sales settlement, are as follows:
(1) the sale of goods by direct collection, whether or not the goods are issued, is the same day as the receipt of sales or obtaining the sales volume and the delivery of the bill of lading to the buyer.
(2) the day when goods are sold and the collection procedures are completed, the collection and acceptance of the goods and the entrustment of bank receivables are carried out.
(3) the sale of goods on credit sale and installment receipts is the date on which the date of collection is agreed according to the contract.
(4) selling goods on a prepayment basis for the day when goods are issued;
(5) entrust other taxpayers to sell goods on a commission basis, for the day when the list of consignee sales is received.
(6) the sale of taxable labor services on the day of the provision of labour and the receipt of sales or obtaining sales volume;
(7) taxpayers act as goods sold on the same day for the transfer of goods.
The period of tax payment for value-added tax is one, three, five, ten, fifteen, or one month. The specific tax payment period of a taxpayer shall be approved by the competent tax authority according to the amount of tax payable by the taxpayer.
(taxpayers who pay taxes in one month for one period shall declare tax within ten days from the date of expiry. If they pay taxes on one, three, five, ten or fifteen days, the tax shall be paid within five days from the date of expiry, and they shall be declared and paid within ten days from the first day of the first month, and the tax payable should be settled last month.
Taxpayers importing goods shall pay taxes within seven days from the day after the Customs has completed the issuance of the tax payment certificate.
Taxpayers exporting goods may declare tax rebates for export goods to the tax authorities on a monthly basis.