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 decided to implement the electronic special value-added tax invoice system (hereinafter referred to as the “electronic special invoice system”) among newly formed and registered taxpayers (hereinafter referred to as “newly-formed taxpayers”) nationwide on the basis of the pilot program implemented in three regions, namely, Ningbo, Shijiazhuang and Hangzhou, at the early stage. The relevant matters are hereby announced as follows:

I. Beginning on December 21, 2020, the electronic special invoice system shall be implemented among the newly-formed taxpayers in 11 regions, namely, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Anhui, Guangdong, Chongqing, Sichuan, Ningbo and Shenzhen, and the scope of invoice recipients shall cover the whole country. The scope of recipients of electronic special VAT invoices (hereinafter referred to as “electronic special invoices”) issued by the taxpayers that have been included in the pilot program in three regions, namely, Ningbo, Shijiazhuang, and Hangzhou, shall be expanded to cover the whole country.

Beginning on January 21, 2021, the electronic special invoice system shall be implemented among the newly-formed taxpayers in 25 regions, namely, Beijing, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Fujian, Jiangxi, Shandong, Henan, Hubei, Hunan, Guangxi, Hainan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Dalian, Xiamen and Qingdao, and the scope of invoice recipients shall cover the whole country.

The specific scope of newly-formed taxpayers subject to the electronic special invoice system shall be determined by the tax services of the State Taxation Administration in all provinces, autonomous regions, municipalities directly under the Central Government, and city specifically designated in the state plan (hereinafter referred to as “provincial tax services”).

II. Electronic special invoices are special VAT invoices made under the supervision of all provincial tax services, with electronic signatures used instead of special invoice seals, and with their legal force, basic uses and basic use provisions, among others, identical with those of paper special VAT invoices (hereinafter referred to as “paper special invoices”). See the Annex for sample electronic special invoices.

III. The invoice code of an electronic special invoice shall be 12 digits, and the coding rules are as follows: the first digit is 0, the second to fifth digits represent the province, autonomous region, municipality directly under the Central Government or city specifically designated in the state plan, the sixth to seventh digits represent the year, the eighth to tenth digits represent the batch, and the eleventh and twelfth digits shall be 13. The invoice number has eight digits and shall be numbered by the year and batch.

IV. Beginning on the date when the electronic special invoice system is implemented in each place, the newly-formed taxpayers which need paper plain VAT invoices, electronic plain VAT invoices (hereinafter simply referred to as “electronic plain invoices”), paper special invoices, electronic special invoices, paper uniform invoices for the sale of motor vehicles, and paper uniform invoices for the sale of second-hand cars in the present regions should uniformly acquire the tax UKey to issue invoices. Tax authorities will provide tax UKey to newly-formed taxpayers for free, and issue electronic special invoices for taxpayers for free by relying on the public service platform for VAT E-invoices.

V. Tax authorities shall verify the number of special VAT invoices to be acquired by taxpayers according to the total number of electronic special invoices and paper special invoices. The upper limit of special VAT invoices (value-added tax control system) of electronic special invoices and paper special invoices shall be the same.

VI. When issuing special VAT invoices, taxpayers can issue electronic special invoices and paper special invoices. If recipients ask for paper special invoices, the drawers shall provide paper special invoices.

VII. In case red-letter electronic special invoices need to be issued because of return of sold goods, errors in voices, suspension of taxable services, sale allowances, etc. after electronic special invoices are issued by taxpayers, the following provisions shall be implemented:

(I) If the buyers have used the electronic special invoices to declare for tax credit, the buyers shall fill in, issue and upload 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”), and shall not fill in the information of corresponding blue-letter electronic special invoices.

If the buyers don’t use the electronic special invoices to declare for tax credit, the sellers shall fill in, issue and upload the Information Sheet in the invoice management system, and shall fill in the information of the corresponding blue-letter electronic special invoices correspondingly.

(II) 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.

(III) The sellers shall issue red-letter electronic special invoices with negative sales in the invoice management system in virtue of the Information Sheet passing the check of the tax authorities’ system. The red-letter electronic special invoices should correspond to the Information Sheet item by item.

(IV) If the buyers have used the electronic special invoices to declare for tax credit, they 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.

VIII. If the recipients obtain the electronic special invoices to declare for credit of VAT on purchase or apply for export tax rebate, or handle tax rebate for others, they shall log on to the public service platform for VAT invoices to confirm the use of invoices. The logon address shall be determined and publicized by the provincial tax services.

IX. Units and individuals can check and verify the information of electronic special invoices through the National Value-Added Tax Invoice Verification Platform (https://inv-veri.chinatax.gov.cn); and they can 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.

X. The taxpayers shall follow the provisions of the Notice by the Ministry of Finance and the State Archives Administration of Regulating the Reimbursement, Bookkeeping and Archiving of Electronic Accounting Vouchers (No. 6 [2020] of the Ministry of Finance) if they use electronic invoices (including electronic special invoices and electronic plain invoices) for reimbursement, book-keeping and archiving.

XI. Announcement shall be implemented on and since December 21, 2020.

It is specially publicized here.

Annex: Electronic Special VAT Invoices (Sample)

State Taxation Administration

December 20, 2020