On March 30, 2014, the State Administration of Taxation (“SAT”) released Announcement  No. 18 (“Announcement 18”) to adjust the procedure for obtaining general value-added tax (“VAT”) payer status.1
Announcement 18’s highlights are as follows:
- Administrative approval for obtaining general VAT payer status has been abolished. Taxpayers only need to register with the tax authority.
- The documents and procedure for obtaining the general VAT payer status are simplified. Taxpayers only need to submit a standard registration form and the tax registration certificate. If the information in the form is correct and consistent with the tax registration certificate, the tax authority must register the general VAT payer status on site (or notify the taxpayer tosupplement or correct the information). The previous field inspection process has been abolished.
- The pre-condition for taxpayers not reaching the general VAT payer threshold but applying for general VAT payer status is also simplified. Announcement18 keeps the pre-condition for setting up account books according to China GAAP, but abolishes the requirement for fixed production and busine ss site.
- Taxpayers reaching the general VAT payer threshold must apply for the general VAT payer status within 20 working days after the declaration period in which the declared revenue exceeds the threshold. If they do not apply, the tax authority must notify them within 10 working days and grant another 10 working days to carry out the formalities. The previous application period was 40 days.
- The general VAT calculation method applies from the date of qualification and VAT special invoices must be obtained as required.
- Announcement 18 has significantly adjusted the administrative procedure for obtaining general VAT payer status. According to SAT, Announcement 18 is an interim administrative measure and SAT is in the process of amending procedures and will re-issue the regulation in the near future.
Date of issue: March 30, 2015. Effective date: April 1, 2015.