Ningbo Issues VAT General Taxpayer Management Approach

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May 20 – The Ningbo municipal office recently issued a notice regarding the management approach for VAT general taxpayers, effective May 1.

The notice, issued May 17, specifies the qualifications for VAT general taxpayers, which include business or enterprise units whose annual taxable sales exceed RMB500,000 and engage in production or service business; or other taxpayers whose annual taxable sales exceed RMB800,000. The annual taxable sales refer to the accumulated VAT sales within 12 consecutive operational months.

Enterprises should use the standard accounting method and provide solid accounting records to tax authorities when applying for VAT general taxpayer status. Newly established enterprises which qualify for the VAT general taxpayer criteria can apply at the local tax authorities within 30 days since tax registration. Enterprises whose annual taxable sales exceed the small-scale taxpayer standards can apply for the VAT general taxpayer status 40 days after the exceeding month.

The notice further explains that small wholesale enterprises refer to enterprises with a registered capital of RMB800,000 or less. Enterprises engaged only in export business and which do not use VAT invoices are excluded.

Taxpayers can get tax rebates upon examination and approval by the tax authorities, and by correctly matching up the rebate invoice, the import VAT from Customs, and the transportation expense sheet. Taxpayers cannot convert their tax status to small-scale taxpayers once they are confirmed as general taxpayers.