For the purposes of fully implementing the Regulation on Optimizing Business Environment, deepening the reform of “simplification of administrative procedures, decentralization of powers, combination of decentralization with appropriate control, and optimization of services” in the taxation field, and enhancing the promotion of the use of electronic invoices, the State Taxation Administration has prepared and issued the Announcement of the State Taxation Administration on Matters Concerning the Implementation of the Electronic Special Value-Added Tax Invoice System among Newly-Formed Taxpayers (hereinafter simply referred to as the “Announcement”), which is now interpreted as follows:
I. What is the background for implementing the electronic special value-added tax invoice system among newly-formed taxpayers?
The State Taxation Administration has implemented electronic plain VAT invoices (hereinafter simply referred to as “electronic plain invoices”) by steps since 2015 in order to meet the needs of economic and social development and tax modernization. The electronic plain invoices have become popular among more and more taxpayers for convenience, easy keeping, timely check, cost saving, and other advantages.
To implement the arrangement of the State Council for speeding up the promotion and application of electronic invoices, the State Taxation Administration has decided to, in line with the active and prudent principles, first implement the electronic special value-added tax invoice system (hereinafter simply referred to as “electronic special invoice system”) among the newly formed and registered taxpayers (hereinafter simply referred to as “newly-formed taxpayers”) in some regions, and then gradually expand this system to more regions and taxpayers. Firstly, implement the electronic special invoice system among newly-formed taxpayers to improve the system and accumulate experience, and then consider implementing this system among other taxpayers. Secondly, develop the pilot program of electronic special invoice system gradually in Ningbo, Shijiazhuang and Hangzhou for newly-formed taxpayers since September 1, 2020, and then implement this system nationwide by two steps on this basis. First step: Beginning on December 21, 2020, implement the electronic special invoice system among the newly-formed taxpayers in 11 regions including Tianjin, with the scope of recipients covering the whole country. Second step: Beginning on January 21, 2021, implement the electronic special invoice system among the newly-formed taxpayers in 25 regions including Beijing, with the scope of recipients cover the whole country.
II. What is the change in the scope of recipients of electronic special invoices issued by the taxpayers previously included into the pilot program?
According to the provisions of the Announcement and relevant policies previously issued by the pilot regions, the scope of recipients of the electronic special VAT invoices (hereinafter simply referred to as “electronic special invoices”）issued by the taxpayers included into the pilot program in the 3 regions of Ningbo, Shijiazhuang and Hangzhou will be limited to the prescribed regions before December 20, 2020 (included), and then expanded to the whole country beginning on December 21, 2020. The scope of recipients of electronic special invoices issued by the newly-formed taxpayers implementing the electronic special invoice system in the above-mentioned regions beginning on December 21, 2020 shall cover the whole country.
III. What are the advantages of electronic special invoices?
Electronic special invoices belong to special VAT invoices, and they are the same as paper special VAT invoices (hereinafter simply referred to as “paper special invoices”) in terms of legal effects, basic uses, and basic usage provisions, etc. Compared with paper special invoices, electronic special invoices have the following advantages:
First, the invoice format is simpler. Electronic special invoices further simplify the invoice format, replace original special invoice seals with electronic signatures, simplify the title of the column “name of goods or taxable labor service, service” into “project name”, and cancel the former column of “seller: (seal)”, making it easier to issue electronic special invoices.
Second, the way of acquisition is easier. Taxpayers may acquire electronic special invoices through Tax Service Hall, Electronic Tax Service and other channels. The electronic special invoices acquired online may be “used immediately after acquired” by taxpayers.
Third, it’s more convenient for long-distance delivery. Taxpayers may deliver electronic special invoices by e-mail and QR code, which is quicker than the delivery of paper special invoices on the spot or by mailing, etc.
Fourth, financial management is more efficient. Electronic special invoices belong to electronic accounting vouchers. Taxpayers may obtain digital invoice details conveniently and hereby improve financial management. Meanwhile, taxpayers may download the electronic VAT invoices format file reader through the National Value-Added Tax Invoice Verification Platform (https://inv-veri.chinatax.gov.cn) to check the electronic special invoices and verify the validity of electronic signatures, lowering the risk of receiving fake invoices.
Fifth, the storage and keeping are more economical. Compared with paper special invoices, electronic special invoices can be stored in an informationalized way without requiring a specific place, which can also greatly lower the costs of follow-up labor management. In addition, taxpayers may repeatedly download electronic special invoices through the free channels provided by tax administrations, preventing the risk of invoice loss and damage.
Sixth, social benefits are more obvious. Electronic special invoices can be delivered quickly, which can help transaction parties to accelerate the settlement of accounts, shorten the payback period, and improve the fund utilization efficiency. Meanwhile, the launching of electronic special invoices is conducive to promoting the further popularization of enterprises’ financial accounting electronization, and producing positive impacts on the digital construction of the whole economy and society.
IV. Why are electronic signatures adopted for electronic special invoices to replace the special invoice seals on original paper invoices?
It is regulated in Article 14 of the Electronic Signature Law of the People’s Republic of China that, reliable electronic signatures have the same legal force as handwritten signatures or seals. To meet the needs of the reform to implement electronic invoice system, electronic signatures are adopted for electronic special invoices to replace original special invoice seals, and taxpayers may download the Electronic VAT Invoices Format File Reader at the National Value-Added Tax Invoice Verification Platform to check the electronic special invoices and verify the validity of electronic signatures.
V. What measures that save taxpayers’ efforts are synchronously launched by tax administrations to implement the electronic special invoice system among newly-formed taxpayers?
Tax departments have constantly optimized the ways of invoice services by closely focusing on promoting the reform for convenient handling of tax affairs and payment of fees and enhancing taxpayers’ sense of gain, innovated and launched five convenience measures by taking the opportunity of electronic special invoice system:
First, acquire invoice issuance equipment for free. Newly-formed taxpayers needing to issue paper plain VAT invoices (hereinafter simply referred to as “paper plain invoices”）, electronic plain invoices, paper special invoices, electronic special invoices, paper uniform invoices for the sale of motor vehicles (hereinafter simply referred to as “paper invoices for motor vehicles”）and paper uniform invoices for the sale of second-hand cars (hereinafter simply referred to as “paper invoices for second-hand cars”) can uniformly acquire tax UKey for issuing invoices. Tax authorities will provide tax UKey to newly-formed taxpayers for free.
Second, issue electronic special invoices for free. Tax administrations will provide the issuance of electronic special invoices for free to taxpayers by relying on the public service platform for VAT E-invoices, and taxpayers can issue electronic special invoices through this platform without paying relevant expenses.
Third, enjoy the service for new usereasily. Tax administrations implement “service for new user” for taxpayers which issuing or receiving electronic special invoices for the first time, and help taxpayers master the policy regulations and key points of operation comprehensively in time by online and office means.
Fourth, notify invoice state in time. Tax administrations have optimized and upgraded the public service platform for VAT invoices, and taxpayers may master in time through the platform the information on the circulation state such as acquisition, issuance, use confirmation, as well as the management state such as normal, red offset, and abnormal of the electronic special invoices acquired. This act can help taxpayers comprehensively know about the full-process information of electronic special invoices, reduce the tax-related invoices of invoices arising from information asymmetry or lag between buyers and sellers, and effectively guarantee taxpayers’ rights and interests.
Fifth, download invoice information in batches. Taxpayers can download in batches the details of the invoices obtained including paper plain invoices, electronic plain invoices, paper special invoices, electronic special invoices, paper invoices for motor vehicles, and paper invoices for second-hand cars through the public service platform for VAT invoices. This will not only provide complete and accurate basic invoice data for taxpayers to realize electronic operation of reimbursement, book-keeping and archiving, but also help taxpayers improve internal management and prevent the risk of repeated reimbursement and book-keeping of electronic invoices. In addition, the convenient acquisition and expanded application of electronic invoice information can also help taxpayers develop financial analysis and strengthen fund and supply chain management, and assist enterprises to improve their operating decisions.
With the promotion of the work on the electronic special invoice system, tax administrations will also launch more innovative service measures to provide more convenient, more efficient and more comfortable tax experience for taxpayers.
VI. What invoices can be issued by the newly-formed taxpayers implementing the electronic special invoice system after acquiring the tax UKey?
After acquiring the tax UKey and verifying corresponding types of invoices, the newly-formed taxpayers implementing the electronic special invoice system can issue paper plain invoices, electronic plain invoices, paper special invoices, electronic special invoices, paper invoices for motor vehicles and paper invoices for second-hand cars.
VII. What specific requirements shall the newly-formed taxpayers implementing the electronic special invoice system meet when verifying the electronic special invoices?
In accordance with the provisions of the Announcement of the State Administration of Taxation on Matters Concerning a Newly-Formed Taxpayer's Initial Application for Value-Added Tax Invoices (Announcement No. 29 [2018]), tax authorities will verify the type of invoices for the newly-formed taxpayers applying for VAT invoices for the first time. The maximum amount of special VAT invoices issued shall not exceed RMB100,000, and no more than 25 special VAT invoices shall be acquired each month. Each provincial tax authority can determine the standards for verifying the type of VAT invoices acquired by the newly-formed taxpayers for the first time in combination with the degree of taxpayers’ tax risk within this scope.
Both electronic special invoices and paper special invoices belong to special VAT invoices. The maximum amount of special VAT invoices verified by tax authorities shall be simultaneously applicable to the electronic special invoices and paper special invoices acquired by taxpayers, and shall be kept consistent. The newly-formed taxpayers implementing the electronic special invoice system can determine the acquisition quantity of electronic special invoices and paper special invoices according to their own needs within the monthly maximum acquisition quantity of special VAT invoices verified by tax authorities.
The newly-formed taxpayers implementing the electronic special invoice system can apply for the “change of version and quantity” according to the needs of production and operation after the tax authorities verify the maximum amount and acquisition quantity of special VAT invoices.
VIII. Can the newly-formed taxpayers implementing the electronic special invoice system issue both electronic special invoices and paper special invoices after acquiring the tax UKey?
The newly-formed taxpayers implementing the electronic special invoice system can issue both electronic special invoices and paper special invoices after acquiring the tax UKey. Some recipients may still need to use paper special invoices upon the need of their own management. When the recipients ask for paper special invoices, the drawers shall issue paper special invoices to them, so as to guarantee the recipients’ rights and interests.
IX. How shall taxpayers issue red-letter electronic special invoices?
Red-letter electronic special invoices may be issued in case of return of sold goods, errors in voices, suspension of taxable services, sale allowances, etc. after electronic special invoices are issued by taxpayers. Compared with the issuance process of red-letter paper special invoices, taxpayers do not have to recover the issued blue-letter electronic special invoices when issuing red-letter electronic special invoices, and the operation is simple and easy. Specifically, the process to issue red-letter electronic special invoices mainly includes the following three steps.
First step, buyers or sellers fill in the Information Sheet for the Issuance of Red-Letter Special VAT Invoices (hereinafter simply referred to as the Information Sheet) in the VAT invoice management system (hereinafter simply referred to as “invoice management system”). There are two ways to issue the Information Sheet according to whether the buyers have used the electronic special invoices to declare for tax credit. The first is that the buyers issue the Information Sheet. If the buyers have used the electronic special invoices to declare for tax credit, the buyers shall fill in and upload the Information Sheet in the invoice management system. Under this circumstance, it’s not required to fill in the information of corresponding blue-letter electronic special invoices in the Information Sheet. The second is that the sellers issue the Information Sheet. If the buyers do not use the electronic special invoices to declare for tax credit, the sellers shall fill in and upload the Information Sheet in the invoice management system. Under this circumstance, it’s required to fill in the information of corresponding blue-letter electronic special invoices in the Information Sheet.
Second step, automatic verification by the information system of tax authorities. Tax authorities will receive the Information Sheet uploaded by taxpayers through network. After the Information Sheet passes the automatic verification of the system, the Information Sheet with “red-letter invoice information sheet number” will be generated, and the information will be synchronized to the taxpayer-end system.
Third step, the sellers as taxpayers issue red-letter electronic special invoices. After finding the Information Sheet having passed verification in the invoice management system, sellers may issue red-letter electronic special invoices, which shall correspond to the Information Sheet item by item.
It shall be noted that, in the case that the buyers have used the electronic special invoices to declare for tax credit, because of the time difference possibly existing between the issuance of Information Sheet by buyers and the issuance of red-letter electronic special invoices by sellers, the buyers shall temporarily transfer out the VAT amount listed in the Information Sheet from the VAT on purchase in the current period, and obtain the red-letter electronic special invoices issued by the sellers, which shall then be taken as accounting vouchers together with the Information Sheet.
X. What shall be noticed in the reimbursement, book-keeping and archiving with electronic invoices by taxpayers?
The taxpayers shall follow relevant provisions of the Notice by the Ministry of Finance and the National Archives Administration of Regulating the Reimbursement, Bookkeeping and Archiving of Electronic Accounting Vouchers (No. 6 [2020] of the Ministry of Finance, hereinafter simply referred to as the “Notice”) if they use electronic invoices (including electronic special invoices and electronic plain invoices) for reimbursement, book-keeping and archiving.
First, taxpayers may only use electronic invoices for reimbursement, book-keeping and archiving in accordance with the provisions of Article 3 of the Notice.
Second, electronic invoices and paper invoices have the same legal force, and in accordance with the provisions of Article 5 of the Notice, the electronic invoices obtained by taxpayers may not be saved in paper form.
Third, if needing printed paper copy of electronic invoices as basis for reimbursement, book-keeping and archiving, taxpayers shall simultaneously save the electronic invoices of which the paper copies are printedin accordance with the provisions of Article 4 of the Notice.
XI. What shall recipients do if they lose the issued electronic special invoices?
If losing or damaging the issued electronic special invoices, recipients may download the electronic special invoices after passing the verification of the National Value-Added Tax Invoice Verification Platform according to the invoice code, invoice number, date of issuance, amount (excluding tax) and other information. If not knowing relevant information, the recipients can also ask for original electronic special invoices again from the drawers.
