The Announcement of the Guangdong Provincial Tax Service of the State Taxation Administration on Issuing the Measures for the Classified and Graded Management of VAT Invoices for Taxpayers in Guangdong Province is interpreted as follows to enable taxpayers and tax authorities to better understand and implement the provisions:

I. Purpose of the Announcement

For the purposes of furthering the reform of “streamlining administration, delegating power and improving regulation and services”, optimizing the business environment in taxation, benefiting taxpayers with more premium and convenient tax services, and meeting their needs of VAT invoice application, the classified management service on the premise of “credit + risk” is introduced to raise tax compliance and taxpayer satisfaction while reducing tax collection and payment costs, and towards that end, the Guangdong Provincial Tax Service of the State Taxation Administration has drafted the Announcement of the Guangdong Provincial Tax Service of the State Taxation Administration on the Measures for the Classified and Graded Management of VAT Invoices for Taxpayers in Guangdong Province.

II. Scope of eligibility

The VAT invoices (hereinafter referred to as “invoices”) mentioned in the Announcement are defined as invoices issued by the taxpayers in the VAT Invoice Management System, including specifically the special VAT invoice, general VAT invoice, uniform invoices for motor vehicle sales and uniform invoices for second-hand vehicle sales, in both the electronic and paper versions.

III. Means of classified and graded management

With reference to factors like tax compliance and tax-related risk profile of taxpayers and after the analysis and identification of tax big data, the tax authorities classify taxpayers into three types (1-3) during invoice application to provide differentiated services and management, so that taxpayers with high tax compliance and tax credibility are entitled to premium tax services while those susceptible to tax-related risks shall receive more stringent post-application oversight.

IV. Optimized services for invoice use

When taxpayers file applications for invoice type verification and invoice use through the e-Tax Bureau, and are identified by tax big data analysis and identification as bearing no or low tax-related risks, they shall receive voluntary invoice application service delivered by the tax authorities, namely automatic processing by the e-Tax Bureau.

The tax authorities shall manage the classification of VAT invoices in taxpayers’ applications on a dynamic basis, with either automatic adjustment made as per the results of tax big data analysis and identification or modification as required by taxpayers in their applications.

Taxpayers disagreeing with the classification, invoice type verification and invoice provision can submit a written application for adjustment to the tax authorities with explanatory notes and supporting documents. For those in need of an adjusted taxpayer classification upon verification, the tax authorities shall timely complete the aforesaid adjustment and provide invoices to them according to the adjusted classification.

The tax authorities at all levels shall zealously explore means of “tax-business co-governance”. Taxpayers can inquire about the instructions on invoice application and rules of invoice use via channels of the official website of Guangdong Provincial Tax Service, Guangdong e-Tax Bureau, 12366 service hotline and taxpayer service halls. The tax authorities can forward questionable information of invoicing to taxpayers on a regular basis, to help them develop an internal control system within their businesses, upgrade the capacity of tax-related risk management and safeguard the legitimate interests of law-abiding businesses.

V. Effective date

The Announcement shall come into effect from January 1, 2021.