Recently, the State Administration of Taxation has issued the Announcement on Several Collection and Administration Issues concerning the Pilot Program of Value-added Tax in lieu of Business Tax (the "Announcement") which shall come into force as of September 1, 2016.
According to the Announcement, four categories of services provided by foreign entities or individuals, such as postal services and receiving and sending services provided outside the territory for exported letters and parcels, shall not be deemed as selling services or intangible assets within the territory. Where individuals lease their immovable property by collecting the total rent in full on a one-off basis, the monthly rent, resulted from by averaging the rent collected according to the rental period corresponding to such rent, is qualified for the value-added tax ("VAT") exemption policy applicable to small and micro enterprises, if such monthly rent income is not higher than CNY30,000. The Announcement also specifies the implementation of single-purpose commercial pre-paid card business that neither enterprises issuing the single-purpose cards or those selling such cards, nor the advance payments in such cards topped up by card users shall be subject to VAT. Sellers of such cards may issue the ordinary VAT invoices rather than the special VAT invoices to card purchasers and persons who top cards up according to the relevant provisions of the Announcement.