Announcement No. 4 of the State Taxation Administration, 2019

　　The issues concerning the VAT exemption policy for small-scale taxpayers whose monthly sales amount is less than CNY 100,000 (inclusive) are announced as follows according to the Circular of the Ministry of Finance and State Taxation Administration on Implementation of Preferential Taxation Reduction Policy for Small Low-profit Enterprises (CS No. 13-2019):

　　1. Small-scale taxpayers with VAT taxable sales and a total monthly sales amount of less than CNY 100,000 (the quarterly sales amount is less than CNY 300,000 with one quarter as one taxation period, the same below) shall be exempted from VAT.

　　For small-scale taxpayers with VAT taxable sales and total monthly sales amount of more than CNY 100,000 but less than CNY 100,000 after deducting the sales amount of real estate in current period, the sales amount of goods, labor service, service and intangible assets shall be exempted from VAT.

　　2. For small-scale taxpayers subject to VAT balance taxation policy, it is required to determine whether they can enjoy the VAT exemption policy stipulated herein based on the sales amount after balancing.

　　The sales amount after the balancing shall be filled in the relevant lines of "VAT exempt sales" in the Value-added Tax Return (Applicable for Small-scale Taxpayers).

　　3. Small-scale taxpayers who pay taxes on a fixed term may choose a tax payment deadline of one month or one quarter, which shall not be changed within one fiscal year once selected.

　　4. As for other individuals referred to in Article 9 of the Detailed Rule for the Implementation of the Provisional Regulation of the People's Republic of China on Value-added Tax, the rental income from the leasing of immovable property in the form of one-time collection may be equally apportioned in corresponding rental period, and the monthly rental income, which does not exceed CNY 100,000 after apportionment, shall be exempted from VAT.

　　5. General taxpayers, whose cumulative sales amount has not exceeded CNY 5 million for 12 consecutive months (with one month as a taxation period) or 4 consecutive quarters (with one quarter as a taxation period) before the registration transfer date, may choose to be transferred to small-scale taxpayers before December 31, 2019.

　　Other matters related to the registration transfer of general taxpayers to small-scale taxpayers shall be subject to the Announcement of the State Taxation Administration on the Unification of Small-scale Taxpayer Standard and Related VAT Issues(Announcement No. 18 of the State Taxation Administration, 2018) and the Announcement of the State Taxation Administration on Unifying Standards on Small-scale Taxpayers Concerning Export Tax Rebate (Exemption)(Announcement No. 20 of the State Taxation Administration, 2018).

　　6. Small-scale taxpayers, who are required to prepay VAT as per the current provisions, shall not be required to prepay tax for the current period if their monthly sales amount in the place where the tax is prepaid does not exceed CNY 100,000. Those who have prepaid the tax before the issuance of the Announcement may apply to local competent tax authority for rebate.

　　7. As for employers and individual businesses among the small-scale taxpayers selling immovable property, it is required to determine whether they shall prepay the VAT according to their taxation period, Article 6 hereof and other provisions of current policies; and other individuals selling immovable property shall be subject to VAT collection and exemption as per the current regulations.

　　8. Small-scale taxpayers with monthly sales amount of less than CNY 100,000 may apply to the competent tax authority for rebate of the taxes already paid due to the issuance of VAT special invoice in current period after all the special invoices have been recovered or the special red-letter invoices have been issued as required.

　　9. Small-scale taxpayers whose sales amount in January 2019 does not exceed CNY 100,000 (with one quarter as a taxation period, the sales amount in the first quarter of 2019 does not exceed CNY 300,000) may apply to the competent tax authority for rebate of the taxes already paid due to the issuance of ordinary invoice in current period when handling tax declaration.

　　X. Small-scale taxpayers, whose monthly sales amount exceeds CNY 100,000, shall use the VAT Invoice Management System to issue the VAT ordinary invoice, uniform invoice for motor vehicle sales, and electronic VAT ordinary invoice.

　　Small-scale taxpayers, who have used the VAT Invoice Management System and whose monthly sales amount does not exceed CNY 100,000, may continue to use the existing tax control equipment to issue invoice. Those who have issued the VAT special invoice voluntarily may continue to issue their own invoice, and pay the VAT on the sales amount of the special invoices issued.

　　XI. The Announcement shall take effect from January 1, 2019. Item 2 of Article 3 and Item 4 of Article 6 of the Announcement of the State Taxation Administration on Matters Concerning Tax Connection and Management of the Pilot of Fully Replacing Business Tax with VAT (Announcement No. 23 of the State Taxation Administration, 2016), Article 3 of theAnnouncement of the State Taxation Administration on Clarifying Certain Issues Concerning the Collection and Management of the Pilot of Replacing Business Tax with VAT (Announcement No. 26 of the State Taxation Administration, 2016), Article 2 of the Announcement of the State Taxation Administration on Matters Concerning the Connection and Management of the Pilot of Replacing Business Tax with VAT(Announcement No. 53 of the State Taxation Administration, 2016) and the Announcement of the State Taxation Administration on Exemption of VAT for Small Low-Profit Enterprises(Announcement No. 52 of the State Taxation Administration, 2017) shall be abolished simultaneously.

　　State Taxation Administration

　　January 19, 2019