Circular of the State Administration of Taxation on Printing and Distributing the Provisions on the Use of the Special Invoices of Value-Added Tax

Circular of the State Administration of Taxation on Printing and Distributing the Provisions on the Use of the Special Invoices of Value-Added Tax
Circular of the State Administration of Taxation on Printing and Distributing the Provisions on the Use of the Special Invoices of Value-Added Tax

Guo Shui Fa [1993] No.150

December 30, 1993

Taxation bureaus of the provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan,

The (hereinafter referred to as "the Provisions") are formulated by the State Administration of Taxation to tighten control over the use of special invoices of Value-Added Tax (hereinafter referred to as "special invoices") and to ensure the successful implementation of the Value-Added Tax crediting system based on the amount of tax specified on invoices. Copies of the Provisions are hereby sent to you with the following notice on the pertinent questions:

I. Special invoices are not only important commercial papers in taxpayers' business activities, but also legal certificates on which both the seller's tax obligation and the amount of impute tax for purchasers are recorded, with a decisive role in the computation and administration of Value-Added Tax. Leading comrades of the State Council have given instructions that the way to administer special invoices should be the same as for bank notes. As such, tax authorities at all levels in various places must pay great attention to the use and administration of special invoices, endeavor to gain the support of government leaders at various levels and assistance from the financial, banking, auditing, administration for industry and commerce, public security, public prosecution and other departments concerned and to make earnest efforts to strengthen on work guidance and administer strictly in accordance with the provisions for the use of special invoices.

II. Starting from January 1, 1994, general taxpayers selling goods or taxable services must issue special invoices in accordance with the Provisions. In case where special invoices are needed but not issued and ordinary invoices are still used, purchasers would not be allowed to claimany credit on input tax. Ordinary invoices issued in the previous year received by general taxpayers can be used as tax-crediting certificates only before January 31. For those that cannot be used as certificates for crediting the input tax of the current period, the input tax which are separated from start-of-period inventory, may be readjusted upward in accordance with provisions of the pertinent policy.

III. Those which violate the Provisions for the Use of Special Invoices shall be dealt with in accordance with the provisions for relevant penalties prescribed in the for the Administrative Measures of the People's Republic of China for Invoices and the Law of the People's Republic of China on the Administration of Tax Levying.

IV. If any problems are found in the implementation of the for the Use of special Invoices of Value-Added Tax, please report them to the State Administration of Taxation promptly. Local governments or departments should not alter these Provisions at will in the course of their implementation and shall abide to implement accordingly.

Appendix:
Provisions on the Use of the Special Invoices of Value-Added Tax

Article 1 Special invoices of Value-Added Tax (hereinafter referred to as "special invoices") shall be obtained, bought and used only by general taxpayers that pay Value-Added Tax, and not by small-scale taxpayers or non-Value-Added-Tax taxpayers.

Article 2 General taxpayers shall not obtain, buy or use special invoices in any one of the following cases:
1.The accounting system is unsound, i.
  ......
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