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Notice on Further Clarifying the Policies Concerning Labor Dispatching Services, the Crediting of Road Tolls and Other Issues Subsequent to the Comprehensive Implementation of the Pilot Project of VAT-for-BT Reform

Document No.:CaiShui [2016] No. 47

Taxes:Value-added Tax,Business Tax

Date of Promulgation:2016-05-01

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2016-04-30


Issued by: Ministry of Finance State Administration of Taxation

Document No.: CaiShui [2016] No. 47

Date of Issuance: 2016-4-30

Financial Departments (Bureaus), State Taxation Bureaus and Local Taxation Bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan, Financial Bureau of Xinjian Production and Construction Corps,

Upon review, the supplementary policies concerning the labor dispatching services in the pilot project period of the VAT-for-BT reform are hereby notified as follows:

I. Labor Dispatching Service Policies

For labor dispatching services provided by general taxpayers, they can, pursuant to the provisions of the Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Carrying out the Pilot Project of the VAT-for-BT Reform (CaiShui [2016] No.36), take all the price and off-price expenses obtained as the sales amount and calculate and pay VAT according to the general calculation method; they can choose to pay VAT based on the balance as well. That is, they can take the balance of all the price and off-price expense obtained deducting the wages and welfare paid to labor dispatching employees by them substituting for the employment unit and the social insurance and the housing accumulation fund paid for the employees by them as the sales amount, and calculate and pay VAT at the levying rate of 5% according to the simplified calculation method.

For the labor dispatching service provided by small-scale taxpayers, they can, pursuant to the provisions of the Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Carrying out the Pilot Project of the VAT-for-BT Reform (CaiShui [2016] No.36), take all the price and off-price expense obtained as the sales amount and calculate and pay VAT at the levying rate of 3% according to the simplified calculation method; they can choose to pay VAT based on the balance as well. That is, they can take the balance of all the price and off-price expense obtained deducting the wages and welfare paid to labor dispatching employees by them substituting for the employment unit and the social insurance and the housing accumulation fund paid for the employees by them as the sales amount, and calculate and pay VAT at the levying rate of 5% according to the simplified calculation method.

The taxpayers, who choose to pay tax based on the balance, shall not issue special VAT invoices for the expense they collect from the employment unit for the wages and welfare paid to labor dispatching employees by them and the social insurance and the housing accumulation fund paid for the employees by them, but they can issue plain invoices.

The labor dispatching service refers to that labor dispatching companies, in order to meet various and flexible labor demands of employment units, dispatch their employees to employment units to work for them under the management of the employment units.

II. Policies of the Crediting of Road Tolls

i. For the tolls of roads, bridges and flood gates paid by general taxpayers from May 1stto July 31st, 2016, the creditable input tax payable can be calculated according to the following formula provisionally based on the charge amount specified in the toll invoice (exclusive of treasury notes, the same hereinafter) obtained.

Creditable input tax payable of the highway toll = Amount specified in the highway toll invoice ÷1+3%×3%

Creditable input tax payable of the toll of the first class roads, the second class roads, bridges and flood gates = Amount specified in the toll invoice of the first class roads, the second class roads, bridges and flood gates ÷1+5%×5%

Tolls refer to the passage fees of roads, bridges and floodgates established and collected by relevant units according to the law and regulations.

ii. Where general taxpayers collect the tolls of the first class roads, the second class roads, bridges and flood gates, whose construction has started before the pilot project is carried out, they can choose to apply to the simplified calculation method and calculate and pay VAT according to the levying rate of 5%.

The construction started before the pilot project refers to the fact that the contract commencement date specified by relevant construction permits is before April 30th, 2016.

III. Other Policies

i. Where taxpayers provide the outsourcing service of human resource, they shall pay VAT according to the brokerage service. Their sales amount does not include the wages paid to the employees of the client unit and the social insurance and the housing accumulation fund paid on behalf of the client unit when they are entrusted by the client unit. They shall not issue special VAT invoices for the expense they collect from the entrusting party for the wages, the social insurance and the housing accumulation fund paid on behalf of the entrusting party, but they can issue plain invoices.

Where general taxpayers provide the outsourcing service of human resource, they can choose to apply to the simplified calculation method and calculate and pay VAT according to the levying rate of 5%.

ii. Where taxpayers rent out their land to others by way of business leasing, they shall pay VAT according to the business leasing service of immovable property.

Where taxpayers transfer the land use right obtained before April 30th, 2016, they can choose to apply to the simplified calculation method, take the balance of all the price and off-price expense obtained deducting the original price of the land use right when it was obtained as the sales amount, and calculate and pay VAT according to the levying rate of 5%.

iii. Where general taxpayers signed the leasing contract of immovable property before April 30th, 2016 or provide the leasing service with the immovable property obtained before April 30th, 2016, they can choose to apply to the simplified calculationmethod, calculate and pay VAT at the levying rate of 5%.

iv. When general taxpayers provide the pipeline transport service and the financing and leasing services of tangible and movable property, the applicable levying-and-refunding policy for the part exceeding 3% of the actual tax burden, as prescribed by the provision of Article II of the Rules on the Transitional Policies Concerning the Pilot Project of the VAT-for-BT Reform (CaiShui [2013] No. 106), shall be continuously executed from January 1stto April 30th, 2016.

IV. The contents as prescribed by the Notice, unless the execution time is otherwise specified, shall be executed from May 1st, 2016.


Ministry of Finance State Administration of Taxation

April 30th, 2016


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