Announcement on Clarifying the Value-added Tax Reduction and Exemption Policy for Small-scale VAT Taxpayers and Other Policies
Announcement of the Ministry of Finance and the State Taxation Administration [2023] No.1
January 9, 2023
The value-added tax reduction and exemption policy for small-scale value-added tax payers and other policies are hereby announced as follows:
I. From January 1, 2023 to December 31, 2023, small-scale value-added tax payers with a monthly sales amount of below CNY100,000 (inclusive) will be exempted from value-added tax (hereinafter referred to as "VAT")
II. From January 1, 2023 to December 31, 2023, small-scale VAT taxpayers whose taxable sales revenues shall be subject to the 3% levy rate shall be eligible for a reduced rate of 1%; for items subject to prepayment of VAT at the rate of 3%, the prepayment will be made at a reduced rate of 1%.
III. From January 1, 2023 to December 31, 2023, the additional VAT deduction policy shall be implemented in accordance with the following provisions:
1. Taxpayers in productive service industries are allowed to deduct the tax payable by 5% of the deductible input tax for the current period. Taxpayers in productive service industries refer to taxpayers whose sales amount from the provision of postal services, telecommunication services, modern services, and life services accounts for more than 50% of the total sales amount.
2. Taxpayers in life service industries are allowed to deduct the tax payable by 10% of the deductible input tax for the current period. Taxpayers in life service industries refer to taxpayers whose sales amount from the provision of life services accounts for more than 50% of the total sales amount.
3. Other matters relating to the application of the additional deduction policy to taxpayers shall be subject to the Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning the Deepening of the Value-Added Tax Reform (Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs [2019] No.39), the Announcement of the Ministry of Finance and the State Taxation Administration on Clarifying the Policy on the Additional Deduction of Value-added Tax for Life Service Industries (Announcement of the Ministry of Finance and the State Taxation Administration [2019] No. 87), and other relevant provisions.
IV. In accordance with the Announcement on Clarifying the Value-added Tax Reduction and Exemption Policy for Small-scale VAT Taxpayers and Other Policies (hereinafter referred to as the "Announcement"), VAT that shall be deducted or exempted may be offset against the tax payable by the taxpayer for the subsequent taxable period or refunded if it has been collected prior to the promulgation of the Announcement.
The Announcement is hereby given.
