For the purposes of supporting the development of micro and small enterprises, manufacturing and other industries, boosting the confidence of market participants, and stimulating the vitality of market participants, the relevant policies concerning further strengthening the implementation of the rebate of period-end VAT retained are hereby announced as follows:
I. The policies regarding the rebate of period-end VAT retained for micro and small enterprises shall be strengthened, and the scope of policy regarding the rebate of incremental VAT retained in advanced manufacturing industries in full amount on a monthly basis shall be expanded to cover eligible micro and small enterprises (including individual industrial and commercial households, here and below), and existing VAT retained for micro and small enterprises shall be refunded in a lump sum.
(I) Eligible micro and small enterprises may apply to competent tax authorities for the rebate of incremental VAT retained from the tax return filing period of April 2022. Before December 31, 2022, conditions for tax rebate shall be governed by Article III of this Announcement.
(II) Eligible micro enterprises may apply to competent tax authorities for the rebate of existing VAT retained in a lump sum from the tax return filing period of April 2022; and eligible small enterprises may apply to competent tax authorities for the rebate of existing VAT retained in a lump sum from the tax return filing period of May 2022.
II. Policies regarding the rebate of period-end VAT retained in industries of “manufacturing”, “scientific research and technical services”, “electric power, heat, gas, and water generation and supply”, “software and information technology services”, “ecological protection and environmental governance” and “transportation, warehousing, and postal services” (hereinafter referred to as “manufacturing and other industries”) shall be strengthened; the scope of policy regarding the rebate of incremental VAT retained in advanced manufacturing industries in full amount on a monthly basis shall be expanded to cover eligible enterprises in manufacturing and other industries (including individual industrial and commercial households, here and below); and existing VAT retained shall be refunded to enterprises in manufacturing and other industries in a lump sum.
(I) Eligible enterprises in manufacturing and other industries may apply to competent tax authorities for the rebate of incremental VAT retained from the tax return filing period of April 2022.
(II) Eligible medium-sized enterprises in manufacturing and other industries may apply to competent tax authorities for the rebate of existing VAT retained in a lump sum from the tax return filing period of July 2022; and eligible large enterprises in manufacturing and other industries may apply to competent tax authorities for the rebate of existing VAT retained in a lump sum from the tax return filing period of October 2022.
III. A taxpayer eligible for the policies in this Announcement shall meet all of the following conditions:
(I) It has the tax credit rating of Grade A or Grade B;
(II) It has no record of fraudulently obtaining the rebate of any VAT retained or export tax rebate, or falsely issuing a special VAT invoice within 36 months before applying for a tax rebate;
(III) It has not been punished by a tax authority twice or more times due to tax evasion within 36 months before applying for a tax rebate;
(IV) It has not enjoyed the policies of refund upon collection and return (refund) after collection from April 1, 2019.
IV. “Incremental VAT retained” as mentioned in this Announcement shall be determined according to the following different circumstances:
(I) Before a taxpayer obtains the rebate of the existing VAT retained in a lump sum, the incremental VAT retained shall be period-end VAT retained of the current period increased compared to March 31, 2019.
(II) After a taxpayer obtains the rebate of the existing VAT retained in a lump sum, the incremental VAT retained shall be the period-end VAT retained of the current period.
V. “Existing VAT retained” as mentioned in this Announcement shall be determined according to the following different circumstances:
(I) Before a taxpayer obtains the rebate of the existing VAT retained in a lump sum, if the period-end VAT retained of the current period is greater than or equal to period-end VAT retained by March 31, 2019, the existing VAT retained shall be the period-end VAT retained by March 31, 2019; and if the period-end VAT retained of the current period is less than the period-end VAT retained by March 31, 2019, the existing VAT retained shall be the VAT retained of the current period.
(II) After a taxpayer obtains the rebate of the existing VAT retained in a lump sum, the existing VAT retained shall be zero.
VI. The medium-sized enterprises, small enterprises and micro enterprises referred to in this Announcement are determined according to the indicators of operating revenue and total assets in the Provisions on Criteria for Classifying Small and Medium-sized Enterprises (No. 300 [2011] of the Ministry of Industry and Information Technology) and the Provisions on the Size Classification Standards for Financial Enterprises (No. 309 [2015] of the People’s Bank of China). Among them, the indicator of total assets is determined according to the year-end value of the previous fiscal year of the taxpayer. The indicator of operating revenue is determined according to the sales amount subject to VAT of the taxpayer in the previous fiscal year; if it is less than one fiscal year, it is calculated according to the following formula:
The sales amount subject to VAT (annual) = The sales amount subject to VAT during the actual duration of the enterprise in the previous fiscal year/number of months of the actual duration of the enterprise × 12
The sales amount subject to VAT referred to in this Announcement includes the sales amount in the filing of a tax return, the sales amount added upon audit, and the sales amount adjusted upon tax assessment. If the difference-based VAT collection policy is applied, it shall be determined based on the sales amount after the difference.
For taxpayers in industries other than those listed in documents No. 300 [2011] of the Ministry of Industry and Information Technology and No. 309 [2015] of the People’s Bank of China, and taxpayers listed in the document No. 300 [2011] of the Ministry of Industry and Information Technology, but not classified or determined using the indicator of operating revenue or total assets, the standard for micro enterprises is the sales amount subject to VAT (annual) of less than RMB1,000,000 (excluding RMB1,000,000); the standard for small enterprises is the sales amount subject to VAT (annual) of less than RMB20,000,000 (excluding RMB20,000,000); and the standard for medium-sized enterprises is the sales amount subject to VAT (annual) of less than RMB100,000,000 (excluding RMB100,000,000).
Large enterprises referred to in this Announcement refer to enterprises other than the above-mentioned medium-sized enterprises, small enterprises and micro enterprises.
VII. The enterprises in manufacturing and other industries mentioned in this Announcement refer to enterprises engaged in “manufacturing”, “scientific research and technical services”, “electric power, heat, gas, and water generation and supply”, “software and information technology services”, “ecological protection and environmental governance” and “transportation, warehousing, and postal services” in the Industrial Classification for National Economic Activities, with the corresponding sales amount subject to VAT accounting for more than 50% of the total sales amount subject to VAT.
The above proportion of sales amount is calculated and determined according to the sales amount of 12 consecutive months before the taxpayers apply for tax rebate; if the operation period before applying for tax rebate is less than 12 months but more than 3 months, it is calculated and determined according to the sales amount in the actual operation period.
VIII. The taxpayers applicable to the policy in this Announcement shall calculate the refundable VAT retained according to the following formulas:
Refundable incremental VAT retained=incremental VAT retained× Component ratio of VAT paid×100%
Refundable existing VAT retained=existing VAT retained× Component ratio of VAT paid×100%
Component ratio of VAT paid refers to the proportion of the credited VAT indicated on the special VAT invoices (including fully digitalized electronic invoices with the words “special VAT invoice”, uniform invoices for the sale of motor vehicles under tax control), electronic plain VAT invoices for turnpike tolls, special customs bills of payment of VAT on imported goods, and vouchers for the payment of taxes paid and remitted during the period from April 2019 to the taxable period before a tax rebate is applied for to the total VAT on purchase that has been credited over the same period of time.
IX. Taxpayers who export goods and services, engage in cross-border taxable acts, and are applicable to the method of tax exemption, credit and rebate should first apply for tax exemption, credit and rebate. After the completion of tax exemption, credit and rebate, if they still meet the conditions stipulated in this Announcement, they can apply for the rebate of VAT retained; and if they are applicable to the method of tax exemption and rebate, the relevant amount of VAT on purchase shall not be used for the rebate of VAT retained.
X. Taxpayers who have obtained the rebate of VAT retained since April 1, 2019 shall not apply to enjoy the policy of immediate VAT refund upon collection and return (refund) after collection. Taxpayers may apply to enjoy the policy of immediate VAT refund upon collection and return (refund) after collection according to regulations by paying back all the rebate of VAT retained obtained in a lump sum before October 31, 2022.
Taxpayers who have been enjoying the policy of immediate VAT refund upon collection and return (refund) after collection since April 1, 2019 may apply for rebate of VAT retained in accordance with the regulations after paying back all the refunded taxes under the policy of immediate VAT refund upon collection and return (refund) after collection in a lump sum before October 31, 2022.
XI. Taxpayers may choose to apply to the competent tax authorities for rebate of VAT retained or carry forward the VAT retained to the next period for continued rebate. Taxpayers should apply for the rebate of VAT retained after completing the VAT return for the current period. The application period for the rebate of VAT retained from April to June 2022 is extended to the last working day of each month.
Taxpayers can apply for both rebate of incremental VAT retained and rebate of existing VAT retained within the specified period. Taxpayers who are in compliance with the policies regarding the rebate of VAT retained in Article I and Article II of this Announcement can choose to apply for the above-mentioned policies on rebate of VAT retained at will.
XII. After taxpayers receive the rebate of the VAT retained, the VAT retained of the current period should be reduced accordingly.
If it is found that taxpayers have been incorrectly applicable to policies concerning the rebate of VAT retained, they should pay back the relevant rebate of VAT retained before the end of the next tax return period.
If taxpayers fraudulently obtain the rebate of VAT retained by increasing false VAT on purchase, making false declarations or by other deceptive means, the tax authorities shall recover the tax rebates fraudulently obtained by them and punish them in accordance with the Law of the People’s Republic of China on the Administration of Tax Collection and other relevant regulations.
XIII. The tax administration matters of the taxpayers who are applicable to the policies regarding the rebate of VAT retained stipulated in this Announcement for the rebate of VAT retained shall continue to be implemented in accordance with the existing regulations.
XIV. The application for rebate of incremental VAT retained by taxpayers other than the above-mentioned taxpayers continues to be executed in accordance with the Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Relevant Policies for Deepening the Value-Added Tax Reform (Announcement No. 39 [2019] of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs), of which, “component ratio of VAT paid” in the third paragraph of Article VIII is executed in accordance with the provisions of Article VIII of this Announcement.
XV. Finance and taxation departments at all levels must attach great importance to the work of the rebate of VAT retained, make clear the base amount, make careful planning, strengthen publicity, implement close collaboration, promote work uniformly, and carry out the centralized rebate of existing VAT retained to micro, small, medium-sized and large enterprises respectively on April 30, June 30, September 30, December 31, 2022, on the basis of taxpayers’ voluntary applications. Tax departments shall handle the rebate of VAT retained for taxpayers in a standard, efficient and convenient way in combination with the taxpayers’ application for the rebate of VAT retained.
XVI. This Announcement shall come into force on April 1, 2022. The Announcement of the Ministry of Finance and the State Taxation Administration on Clarifying the Policies on the Rebate of Period-End VAT Retained in Certain Advanced Manufacturing Industries (Announcement No. 84 [2019] of the Ministry of Finance and the State Taxation Administration), Article VI of the Announcement of the Ministry of Finance and the State Taxation Administration on Specifying VAT Policies for the Lease of State-Owned Land and Other Matters (Announcement No. 2 [2020] of the Ministry of Finance and the State Taxation Administration) and the Announcement of the Ministry of Finance and the State Taxation Administration on Clarifying the Policies on the Rebate of Period-End VAT Retained in Advanced Manufacturing Industries (Announcement No. 15 [2021] of the Ministry of Finance and the State Taxation Administration) shall go invalid at the same time.
The Announcement is hereby made.
Ministry of Finance and State Taxation Administration
March 21, 2022
