FAQ for new tax rule
Q1: What is the calculation basis of corporate income tax payable by non-tax-resident enterprises where VAT is also payable?
A: According to the Announcement [2013] No. 9, effective from February 19, 2013, in case both VAT and corporate income tax ("CIT") are payable by a non-tax-resident enterprise for taxable income sourced from China which is not connected to a permanent establishment in China, when calculating PRC CIT (in the form of withholding tax), the relevant revenue to be used shall exclude VAT. It remains unclear whether the above principle shall also be used where CIT is payable for taxable income earned via a permanent establishment in China.
Q2: What are the new procedural requirements regarding VAT and consumption tax declarations related to exportation of goods and services effective from April 1, 2014?
A: According to The Administrative Measures on VAT and Consumption Tax Related to Exportation of Goods and Services effective from April 1, 2013, provide comprehensive and detailed guidance on various procedure and filing issues, e.g. application for VAT refund calculation method, document requirements for tax declarations involving exportations.
Q3: Can tax invoices be issued on-line?
A: According to State Administration of Tax Decree [2013] No. 28 effective from April 1, 2013,, VAT tax invoice and other tax invoices can be issued via the on-line tax issuance system. Tax Payers may apply with the tax authorities in order to be able to issue tax invoices via the on-line system.
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