STA Launches the Pilot Program on Issuing on a Commission Basis Special Value-added Tax Invoices by Online Platform Enterprises Engaged in Road Freight Transportation
The State Taxation Administration ("STA") has recently issued the Circular on Initiating the Pilot Program on Issuing on a Commission Basis Special Value-added Tax Invoices by Online Platform Enterprises Engaged in Road Freight Transportation (the "Circular") which shall take effect from January 1, 2020.
According to the Circular, upon approval of the concerned provincial tax service of the STA, the online platform enterprises engaged in road freight transportation that participate in the pilot program (the "pilot enterprises") may issue, on a commission basis, special value-added tax invoices to small-scale taxpayers doing business in the freight transportation industry (the "members") that meet four conditions, including "doing business in its own name and having completed tax registration (including interim tax registration)", and handle tax-related matters on behalf of them. Meanwhile, the Circular clearly states that a pilot enterprise shall meet four conditions, including "examining the qualifications of each member and promising that the conveyances actually used to deliver transportation services have the legal and valid vehicle operation certificates and the drivers have obtained the legal and valid qualification certificates". Moreover, the Circular calls on pilot enterprises to issue on a commission basis the special value-added tax invoices to their members, in accordance with applicable requirements. It is provided that, for example, a pilot enterprise shall issue on a commission basis special value-added tax invoices to a member only for the freight transportation business solicited and undertaken by such member on its platform.