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Value-added Tax (VAT) – Regulations/Circulars

Public Notice Jointly Issued by MOF and STA on Further Implementing the Refund of VAT Credit Balance

The Ministry of Finance (MOF) and State Taxation Administration (STA) jointly issued Public Notice [2022] No. 14 to further enhance the polices on the end-of-period excess input VAT credit refund.

  1. For Small-and-tiny Enterprises (STEs), the applicable scope of the policy of full refund of incremental VAT credits on a monthly basis that is currently enjoyed by the advanced manufacturing sector is expanded to cover all qualified STEs (including individually owned businesses). Also, the STEs can enjoy a lump sum refund of existing VAT credits.
  2. For 6 specific sectors (i.e. “manufacturing”, “scientific research and technical services”, “electricity, heating, gas and water production and supply", "software and information technology services", "ecological protection and environmental governance" and "transport, warehousing and postal " sectors, hereinafter referred to as “manufacturing and other sectors”) , the applicable scope of the policy of full refund of incremental VAT credits on a monthly basis that is currently enjoyed by the advanced manufacturing sector, to all qualified enterprises (including individually-owned businesses) in the manufacturing and other sectors. Also, those enterprises can enjoy a lump sum refund of existing VAT credits.

Public Notice Jointly Issued by the MOF and STA Regarding the VAT Exemption Treatment for Small-scale VAT Payers 

The MOF and STA jointly issued Public Notice [2022] No. 15 to further support the development of STEs.

  1. From 1 April 2022 to 31 December 2022, the income of the small-scale VAT payers with an applicable VAT rate of 3% is exempt from VAT.
  2. For income items subject to prepayment of VAT at the rate of 3%, the VAT prepayment will be suspended.
  3. Relevant tax preferential policies for COVID-19 prevention and control as stipulated in Public Notice [2021] No. 7 is extended until 31 March 2022.

For more information, please contact:
Robert Li
National Indirect Tax Leader - PwC China

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