Change from Business Tax into VATIn case of divergence of interpretation, the Chinese text shall prevail.

Announcement of the State Administration of Taxation on Relevant Issues Concerning the Qualification Accreditation for General VAT Taxpayers under the Pilot Project Reform of VAT for Business Tax in Transportation and Certain Modern Service Industries

Document No.:Announcement No.28, 2013 of the State Administration of Taxation

Taxes:Change from Business Tax into VAT

Date of Promulgation:2013-08-01

IssueDepartment:State Administration of Taxation

Date of Implementatio:2013-05-31


In accordance with the "Notice of the Ministry of Finance and the State Administration of Taxation on Taxation Policies for Carrying out Nationwide the Pilot Project Reform of VAT for Business Tax in Transportation and Certain Modern Service Industries" (Cai Shui [2013] No.37) and the "Administrative Measures for the Qualification Accreditation of General VAT Taxpayers" (Order No.22 of the State Administration of Taxation), the relevant issues concerning the qualification accreditation of general VAT taxpayers for taxpayers who are under the pilot project reform of VAT for business tax (hereinafter referred to as VAT-for-BT reform) are hereby notified as follows:


I. Taxpayers of the transportation industry and some modern service industries which are included in the scope of pilot project reform of VAT for business tax shall, as required by the Announcement, complete the qualification accreditation formalities.


II. In addition to the circumstances specified in Article III of this Announcement, taxpayers of the pilot project whose annual sales volume of taxable services before the launch of the pilot project of VAT-for-BT reform (hereinafter referred to as before the launch of pilot projectis more than CNY5 million shall apply for the qualification accreditation for general VAT taxpayers with the in-charge taxation authorities.

The annual sales volume of taxable services of taxpayers under the pilot project reform prior to the implementation of VAT-for-BT reform shall be calculated according to the following formula:


Annual sales volume of taxable services = total turnover of taxable services for not more than 12 consecutive months ÷(1+3%)


As for taxpayers of the pilot project who are subject to the collection of business tax on a deducted base according to the current business tax regulations, the turnover of taxable services shall be calculated based on the turnover before deduction.


III. Taxpayers of the pilot project who have obtained the qualification of general VAT taxpayers and who are engaged in taxable services at the same time do not need to re-apply for the qualification accreditation. The in-charge taxation authorities shall produce and send the "Notice on Tax Matters" to inform taxpayers.


IV. Taxpayers of the pilot project whose annual sales volume of taxable services before the launch of the pilot project is not more than CNY5 million may apply for the qualification accreditation for general VAT taxpayers with the in-charge taxation authorities.

V. Prior to the pilot project specific measures for the qualification accreditation for general VAT taxpayers of taxpayers of the pilot project shall be formulated by state taxation bureaus of provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan under the pilot project in accordance with Order No.22 of the State Administration of Taxation and this Announcement, and then, such measures shall be reported to the State Administration of Taxation for the record.

VI. Subsequent to the pilot project, taxpayers of the pilot project shall, in accordance with Order No.22 of the State Administration of Taxation and relevant provisions, complete the general VAT taxpayer qualification formalities. In accordance with relevant provisions of the VAT-for-BT reform, taxpayers of the pilot project who are eligible for deduction based on balance when determining sales volume, their annual sales volume of taxable services shall be calculated on the basis of the amount before deduction.


VII. If taxpayers of the pilot project are simultaneously engaged in selling goods, providing services of processing, repair and replacement and other taxable services, the sales volume of taxable goods and labor services and the sales volume of taxable services shall be separately calculated and be respectively subject to the criteria of qualification accreditation for general VAT taxpayers.


VIII. After obtaining the qualification of general VAT taxpayers, if taxpayers of the pilot project evade VAT, cheat for export tax refund and issufraudulent invoices of VAT deduction certificates and so on, the in-charge taxation authorities shall demand them to attend a rehabilitation training course with a period not less than six months. 


IX. The Announcement shall become effective as of August 1, 2013. The "Announcement of the State Administration of Taxation on Issues Concerning Qualification Accreditation of General VAT Taxpayers in the Pilot Project Reform of VAT for Business Tax in Eight Provinces and Cities Including Beijing" (Announcement No.38, 2012 of the State Administration of Taxation) shall be repealed simultaneously.

The Announcement is hereby described as above.


State Administration of Taxation

May 31, 2013


Send copies to: state taxation bureaus, local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan.


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