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 Matters Concerning Qualification Accreditation of General Taxpayers for the Pilot Project of VAT for Business Tax Reform in Shanghai

Document No.:Announcement No.65, 2011 of the State Administration of Taxation

Taxes:Change from Business Tax into VAT

Date of Promulgation:2012-01-01

IssueDepartment:State Administration of Taxation

Date of Implementatio:2011-12-02


In accordance with the "Circular of the Ministry of Finance and the State Administration of Taxation on the Implementation of the Pilot Project of VAT for Business Tax Reform in the Transportation and Certain Modern Service Industries in Shanghai" (Cai Shui [2011] No. 111), the issues on qualification accreditation of the general VAT payers for the pilot project of VAT for Business Tax reform in Shanghai are hereby announced as follows: 


I. For the pilot project taxpayers whose annual sales amount of taxable service is over CNY5 million, except those who are regulated in Article 2 and Article 3 of the announcement, they shall apply with the in-charge taxation authorities for the qualification accreditation of general VAT payers (hereinafter referred to as general taxpayers).


The term "annual sales amount of taxable services" refers to the total sales amount of services  from transportation and certain modern service industries, including the tax-exempt and tax-relief sales amount, provided by the pilot project taxpayers within the period of operation of no more than 12 consecutive months. As for pilot project taxpayers who determine the sales amount according to Item (3) of Article 1 of the "Provisions on Relevant Matters Concerning the Pilot Project of VAT for  Business Tax Reform in the Transportation and Certain Modern Service Industries" (printed and distributed by Cai Shui [2011] No.1), their annual sales amount of taxable services shall be calculated on the sales amount without deduction.

II. The pilot project taxpayers who have obtained the qualification of the general taxpayer and also have provided taxable services do not need to re-apply for accreditation; the in-charge taxation authorities shall prepare the "Notification of Tax Matters" and notify the taxpayers.


III. Taxpayers engaged in land and inland waterway freight transportation business who used to issue invoices by themselves and have passed the annual qualification examination in 2011y the in-charge taxation authorities shall be identified as general taxpayers, regardless of whether their annual sales amount of taxable services is over CNY5 million or not. They do not need to submit an application for accreditation for the purpose of carrying out the qualification accreditation of general taxpayers. However, the in-charge taxation authorities shall make and deliver the "Notification on Tax Matters", and notify the taxpayers.


IV. For pilot project taxpayers whose annual sales amount of taxable services is not over CNY5 million and for newly-operating pilot project taxpayers, they shall apply for the qualification of the general taxpayer with in-charge taxation authorities.


For pilot project taxpayers who have submitted the application and satisfy the following conditions at the same time, the in-charge taxation authorities shall carry out the qualification accreditation of general taxpayers for them:


(1) They operated through a permanent place;

(2) They are able to set up accounting books according to the regulations specified in the State's unified accounting system, carry out accounting and assessment based on legal and effective documents, and provide accurate tax information.

V. For pilot project taxpayers who have committed behaviors such as VAT evasion, tax refund fraud, and writing false VAT deduction certificate after obtaining the qualification of general taxpayers, the in-charge taxation authorities may enforce on them a tax educational counseling   for a period of not less than 6 months.


VI. The specific procedures for the qualification accreditation of general taxpayers for pilot project taxpayers shall be determined by Shanghai State Taxation Bureau according to the "Administrative Measures for the Determination of the Qualification of General VAT Payers" (Order No.22 of the State Administration of Taxation) and this announcement, and shall be reported to the State Administration of Taxation for the records.


VII. The announcement shall come into force on January 1, 2012.


The announcement is hereby given.


State Administration of Taxation



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