Beijing, 8 Aug (Zhongxin Net) -- The second deliberation draft of the draft value-added tax law was submitted to the Standing Committee of the 28th National People's Congress for deliberation on 28 August. The draft further improves the tax retention and refund system, clearly stipulating that taxpayers have the right to choose the treatment of retained tax credits.
VAT is the largest tax in China, accounting for about 30% of the national tax revenue. On the whole, in accordance with the idea of shifting the tax system, the draft VAT Law keeps the current tax framework and tax burden level basically unchanged, and upgrades the interim regulations and relevant policy provisions of VAT into law, mainly stipulating the scope of taxation, taxpayers, tax rate, tax payable, tax incentives and collection management. In December 2022, the 12th meeting of the Standing Committee of the <>th National People's Congress held its first review of the draft.
The second deliberation draft of the draft for this review is proposed to make the following major changes: First, the existing relevant policies and regulations will be upgraded into law, and the small-scale taxpayer system will be enriched and improved. The second is to refine and clarify the specific circumstances of simple tax calculation. The third is to further clarify the scope and requirements for authorizing the State Council to formulate special preferential policies. Fourth, it clearly stipulates that taxpayers have the right to independently choose the treatment of retained tax credits. Fifth, it is stipulated that the amount of value-added tax shall be separately listed on the transaction voucher in accordance with the regulations of the State Council. Sixth, in accordance with the provisions of the Legislation Law and the requirements of the statutory principle of taxation, further standardize the relevant tax legislative authorization provisions.
In terms of improving the small-scale taxpayer system, the Second Deliberation Draft of the Draft makes the following amendments: First, the criteria for small-scale taxpayers are clarified, and taxpayers whose annual value-added tax sales do not exceed RMB 5 million are small-scale taxpayers; Second, it is added that small-scale taxpayers with sound accounting and able to provide accurate tax information can register with the competent tax authority and calculate and pay value-added tax according to the general tax calculation method; Third, it adds provisions that, in accordance with the needs of national economic and social development, the State Council may adjust the standards for small-scale taxpayers and report them to the Standing Committee of the National People's Congress for the record.
In recent years, China has implemented a large-scale tax retention and rebate policy, which has reduced the tax burden of enterprises. The outside world is very concerned about the content of the second deliberation draft of the VAT Law involving tax refunds.
In terms of tax retention and refund, the Second Deliberation Draft of the Draft absorbs the achievements of the reform of tax retention and refund in recent years, and further improves the tax retention and refund system on the basis of the relevant provisions of the Interim VAT Regulations. The draft clarifies two ways to deal with retained tax credits, including carrying forward the deduction in the next period and returning it to taxpayers; It is clearly stipulated that taxpayers have the right to choose the treatment of retained tax credits, and can choose to carry forward the next period to continue the deduction, or apply for a refund; Authorize the State Council to formulate relevant specific measures. (End)