VAT payers in China are separated into two different categories – general taxpayers and the small-scale taxpayers – and the VAT rates vary for different statuses.General taxpayers are subject to a 13% VAT rate for designated goods and a 17% VAT rate for all other goods and all taxable services.

 

Although the VAT rate for small-scale taxpayers is much lower, obtaining the general taxpayer status is still essential and beneficial for companies with considerable annual business turnover, because the status has the following advantages:

 

1. Increase companies’ range of potential clientele as well as credibility by allowing them to issue official VAT invoice.

 

2.Allow companies to deduct the input VAT from output VAT.

 

Requirements for General Taxpayer Application

 

1. Manufacturing enterprises (enterprises engaged or mainly engaged in goods production or taxable service provision) with an estimated annual taxable turnover exceeding RMB500,000.

 

2. Other types of enterprises (enterprises where at least 50 percent of their income comes from the wholesale or retail of goods) with an estimated annual taxable turnover exceeding RMB800,000.

 

3.Being able to establish account books according to the unified accounting system of the State, conduct accounting in light of valid and effective vouchers, and provide accurate tax information.

 

4. Having fixed premises of production and operation

 

Required Documents

 

1. Business License, Organization Code Certificate and Tax Registration Certificate

 

2. Company leasing contract (The lessee should be acted by company and for commercial use only with more than one year’s rent and the lease contract should be endorsed by local Housing Management Authority)

 

3.Copy of ID card of legal person,shareholders and accountant as well as photocopy of Accountant Certificate;

 

4.Capital Verification Report

 

5. Bank reconciliation and bank account opening License

 

6.Sales Contract of Goods;
 

7.Articles of Association (signatures and seals of shareholders)

 

8.Company’s financial policy in Chinese

 

9.Invoice control policy in Chinese

 

10.Export enterprises should also submit export permission or China Customs record

 

For further information or assistance, please feel free to contact us

 

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