Recently, the Ministry of Finance and the State Administration of Taxation have jointly issued the Circular on Matters concerning Toll-Based Value-Added Tax Credit Policies for Toll Roads (the "Circular") with effect as of August 1, 2016.
According to the Circular, the input value-added tax (VAT) credit on road, bridge, and gate tolls paid by VAT general taxpayers may be calculated, for the time being, on the basis of the fee amount indicated in the toll invoice (not including fee receipts, below the same) received by the taxpayers, its calculation formula are: Input VAT credit on highway tolls = the fee amount indicated in the corresponding toll invoice÷(1+3%)×3%; Input VAT credit on tolls for Class I roads, Class II roads, bridges, and gates = the fee amount indicated in the corresponding toll invoice ÷(1+5%)×5%. Meanwhile, the Circular clarifies that tolls refer to the fees for passing through roads, bridges, and gates that are instituted and collected by relevant entities in accordance with laws or regulations.