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 formulated the Measures for the Classified and Graded Management of VAT Invoices for Taxpayers in Guangdong Province, which is hereby published.

The Announcement is hereby issued.

Guangdong Provincial Tax Service of State Taxation Administration

December 28, 2020

Measures for the Classified and Graded Management of VAT Invoices for Taxpayers in Guangdong Province

Article 1 For the purposes of furthering the reform of “streamlining administration, delegating power and improving regulation and services”, optimizing the business environment in taxation, and benefiting taxpayers with more premium and convenient tax services, the classified management service on the premise of “credit + risk” is introduced for taxpayers in invoice application to raise tax compliance and taxpayer satisfaction while reducing tax collection and payment costs. The Measures are formulated pursuant to the Measures of the Peoples Republic of China for the Administration of Invoices and the detailed rules of implementation, as well as relevant provisions on VAT invoice management.

Article 2 The VAT invoices (hereinafter referred to as “invoices”) mentioned in the Measures are defined as invoices issued by the taxpayers in the VAT Invoice Management System, including specifically the special VAT invoice, general VAT invoice, uniform invoice for motor vehicle sales and uniform invoice for second-hand vehicle sales, in both the electronic and paper versions. Other types of invoices are not managed in the Measures.

Article 3 Relying on the information technology, the tax authorities leverage tax big data and pool taxpayer information of tax registration, tax credit rating, invoice issuance, tax filing and tax-related risk to scientifically set up early warning and monitoring indicators in the integrated assessment of taxpayers and adopt the classified and graded management of taxpayers in invoice application.

Article 4 The classified management mentioned in the Measures is defined as the practice of the tax authorities using tax big data to classify taxpayers when applying for invoices in a scientific approach following their actual operations and tax administration information with the resultant provision of differentiated service 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.

Article 5 The graded management mentioned in the Measures is defined as the clarification of graded responsibilities in invoice management by the tax authorities on the basis of scientific classification of taxpayers. Provincial tax authorities are tasked with coordinating efforts to set up and unify the procedural norms of the classified and graded management system of invoice application, prefectural and municipal tax authorities are responsible for organizing and delivering classified and graded services and management of invoice application within their jurisdictions, while county- (district-) level tax authorities and bureaus (offices) at the grassroot level are given the remit of implementing classified and graded services and management of invoice application, culminating in a structure that features a clear division of professional duties and coherence in coordination.

Article 6 Based on elements of tax compliance and tax-related risk profile and through tax big data analysis and identification, the tax authorities classify taxpayers into three types (1-3) during invoice application.

Type-1 Taxpayers are taxpayers with a tax credit rating of A or B and in absence of any current risk of suspected fraudulent issuance or deduction of VAT invoices through tax big data analysis and identification.

Type-2 Taxpayers are taxpayers not eligible for the Type-1 and Type-3 classifications.

Type-3 Taxpayers are taxpayers with the risk of suspected fraudulent issuance or deduction of VAT invoices through tax big data analysis and identification, legal representatives, financial director and other tax-related professionals falsely establishing venture businesses with multiple related parties nationwide, or taxpayers suspected of duplicitous filing and other higher risks.

Should taxpayers withhold assent to the classification, they can lodge a petition to the tax authorities as per the provisions of Article 15 of the Measures.

Article 7 Taxpayers shall complete the prescribed real-name authentication prior to invoice application.

Article 8 The tax authorities approve the types of invoices that taxpayers can apply for with reference to their production and operation, with the maximum number of monthly applications and maximum invoice value ratified by the results of tax big data analysis and identification.

I. Type-1 Taxpayers can apply for invoices on demand with expedited tax services, usually receiving 2 to 3 months’ worth of invoice usage in one application.

II. Type-2 Taxpayers can apply for invoices on a regular basis with enhanced invoicing guidance, usually receiving 1 month’s worth of invoice usage in one application.

1. Initial invoice application of Type-2 Taxpayers:

A. General taxpayers can apply for not more than 25 special VAT invoices per month with the maximum value of RMB 100,000 per invoice, and not more than 50 general VAT invoices per month with the maximum value of RMB 100,000 per invoice. The total number of special and general VAT invoices in monthly application is capped within 50.

B. Small-scale taxpayers can apply for not more than 25 special VAT invoices per month with the maximum value of RMB 10,000 per invoice, and not more than 50 general VAT invoices per month with the maximum value of RMB 10,000 per invoice. The total number of special and general VAT invoices in monthly application is capped within 50.

C. General taxpayers can apply for not more than 25 uniform invoices for motor vehicle sales per month with the maximum value of RMB 1,000,000 per invoice, while small-scale taxpayers can apply for not more than 25 uniform invoices for motor vehicle sales every month with the maximum value of RMB 100,000 per invoice.

2. Type-2 Taxpayers can file applications to the tax authorities should they intend to add new invoice types, increase the number of monthly usage or raise the maximum invoice value on account of changes to production and operation. The tax authorities shall review and make modifications accordingly as per Articles 9 and 10 of the Measures.

III. Type-3 Taxpayers receive a limited supply of invoices with greater risk alert and ex post oversight from the tax authorities.

1. Initial invoice application of Type-3 Taxpayers:

A. General taxpayers can apply for not more than 25 special VAT invoices per month with the maximum value of RMB 10,000 per invoice, and not more than 50 general VAT invoices per month with the maximum value of RMB 10,000 per invoice. The total number of special and general VAT invoices in monthly application is capped within 50.

B. Small-scale taxpayers can apply for not more than 25 special VAT invoices per month with the maximum value of RMB 1,000 per invoice, and not more than 50 general VAT invoices every month with the maximum value of RMB 1,000 per invoice. The total number of special and general VAT invoices in monthly application is capped within 50.

C. General taxpayers can apply for not more than 10 uniform invoices for motor vehicle sales per month with the maximum value of RMB 1,000,000 per invoice, while small-scale taxpayers can apply for not more than 10 uniform invoices for motor vehicle sales per month with the maximum value of RMB 100,000 per invoice.

2. Type-3 Taxpayers can file applications to the tax authorities, should they intend to add new invoice types, increase the number of monthly usage or raise the maximum invoice value on account of changes to production and operation, only after issuing all the invoices already received and completing the return filing and payment of VAT attributable to the previous taxable period. The tax authorities shall review and make modifications accordingly as per Articles 9 and 10 of the Measures.

IV. The uniform invoices for second-hand vehicle sales shall be managed in the same way as general VAT invoices. The tax authorities will provide invoices to taxpayers complying with the provisions of the Measures for the Administration of the Circulation of Second-hand Automobiles (Order No.2 [2005] of Ministry of Commerce, Ministry of Public Security, State Administration for Industry and Commerce and State Taxation Administration, amended as per Order No.3 [2017] of Ministry of Commerce).

V. Taxpayers should follow the relevant provisions of administrative permits to apply for the maximum invoice value of special VAT invoices.

Article 9 When taxpayers file applications to add new invoice types, increase the number of monthly use or raise the maximum invoice value on account of changes to production and operation, the tax authorities shall consider their business scope and size as well as up-to-date information on tax filing and invoicing to provide them invoices based on results of tax big data analysis and identification.

Article 10 When taxpayers apply for a number and the maximum value of invoices higher than those prescribed by the results of tax big data analysis and identification, they can submit supporting documents of business authenticity, such as business contracts and agreements, in their application for adjustment to the tax authorities. The latter shall review the submitted document, conduct tax interview or field inspection when necessary and complete the document review and tax interview within 5 working days and field inspection within 10 working days from application acceptance respectively. The tax authorities shall provide invoices to taxpayers based on review results.

Article 11 The tax authorities shall provide contact-free channels for taxpayers, such as online application and invoice delivery by post, so they can make invoice applications online, via self-service tax terminals or in taxpayer service halls.

Article 12 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.

Article 13 The tax authorities shall perform field inspection on taxpayers meeting the following conditions when making invoice applications:

1. For taxpayers applying for special VAT invoices with a maximum invoice value at or above RMB 1,000,000, the tax authorities shall perform ex ante field inspection in compliance with the provisions of the State Taxation Administration, which will have to be completed within 10 working days from the date of acceptance.

2. The tax authorities shall perform field inspection within 30 working days after verifying the invoice types for Type-1 and Type-2 Taxpayers applying for general VAT invoices and uniform invoices for motor vehicle sales with a maximum invoice value at or above RMB 1,000,000 and in large invoice usage, as well as for Type-2 Taxpayers applying for special VAT invoices with a maximum invoice value of RMB 100,000 and in large invoice usage.

3. The tax authorities shall perform field inspection within 10 working days after verifying the invoice types for Type-3 Taxpayers applying for general VAT invoices and uniform invoices for motor vehicle sales with a maximum invoice value at or above RMB 100,000 and in large invoice usage, as well as for Type-3 Taxpayers applying for special VAT invoices with a maximum invoice value of RMB 100,000 and in large invoice usage.

4. The tax bureaus in individual prefectures and cities should determine the scope of ex post field inspection in line with local practice of tax administration.

Article 14 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.

Article 15 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, and the tax authorities shall initiate the process of manual adjustment with no delay. 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.

Article 16 The tax authorities shall make great efforts to give instructions and alerts to taxpayers vis-à-vis invoice use. For taxpayers using invoices in an irregular way with no just cause, the tax authorities should adjust the classification or change the amount of invoice use and maximum invoice value ex officio. For taxpayers detected with the risk of suspected fraudulent issuance of VAT invoices and unable to be contacted for interviews or absent on two scheduled interviews, it is the prerogative of the tax authorities to enlist them as risky taxpayers and suspend their invoicing qualification pursuant to relevant provisions.

Article 17 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.

Article 18 The Measures shall come into effect from January 1, 2021. Article 5 of the Announcement of the Guangdong Provincial Tax Service of the State Taxation Administration on the Introduction of “Packaged” Services for Newly Registered Taxpayers (Announcement No.19 [2018] of Guangdong Provincial Tax Service of State Taxation Administration) shall be repealed concurrently. The Guangdong Provincial Tax Service of the State Taxation Administration shall reserve the right of interpreting the Measures.