The State Administration of Taxation ("SAT") has recently issued the Administrative Measures for Pre-tax Deduction Certificates for Enterprise Income Tax Purposes (the "Measures"), effective from July 1, 2018.
According to the Measures, it is made clear that the receipt vouchers, internal vouchers and split payment vouchers may also be taken as pre-tax deduction certificates; next, requirements with respect to the categories of pre-tax deduction certificates, what to be provided on the certificates, time when these certificates are obtained, re-issuance of these certificates, and replacements of these certificates, are provided for in detail; and third, remedies are provided when enterprises fail to obtain external vouchers or the external vouchers they have obtained do not conform to relevant rules. In particular, the Measures note that, pre-tax deduction certificates are classified by source into internal vouchers and external ones. In the event that the item, the costs of which are incurred domestically by an enterprise, is not taxable, and the counterparty is an entity, the other external voucher, rather than an invoice, issued by this entity, may be used as the pre-tax deduction certificate; however, if the counterparty is an individual, the enterprise's internal voucher may be used for this purpose. For expenditures borne by an enterprise for goods purchased from overseas or for labor services, the invoices, or some other receipt vouchers or relevant tax payment certificates which have the equivalent nature of invoices, issued by the counterparty, may be used as the certificates to offset the taxable income for enterprise income tax purposes.