Lately, the State Administration of Taxation ("SAT") has released the Announcement on Enhancing Administration of the Deduction of Customs Import Value-added Tax (the "Announcement"), which shall come into force as of the date of promulgation.
The Announcement applies to the general VAT taxpayers who import goods and have acquired the tax payment certificate of customs falling within the scope of VAT deduction. The Announcement clearly states that while importing goods, a taxpayer shall report the correct corporate name and ensure the consistency between the corporate name indicated on the tax payment certificate of customs and that registered in tax authorities. Also, the Announcement requires that the taxpayer shall apply for auditing and comparison by submitting the relevant information on the tax payment certificate of customs according to relevant provisions, after obtaining such certificate. The tax authority will audit and compare the information provided by the taxpayer against that transmitted from the customs. If such auditing and comparison result in consistency, the value-added tax amount may be offset as the input tax against the output tax; in the event that the taxpayer fails to submit the said information within certain time limit, the input tax shall not be deducted. Where such auditing and comparison results in inconsistency, the tax amount given shall not be deducted temporarily until an inspection has been conducted to confirm that information indicated on the tax payment certificate of customs is consistent with the taxpayer's actual import business.