VAT General Taxpayer Application

On 10th February 2010, China’s State Administration of Taxation (SAT) issued Decree [2010] No. 22 "Administrative Measures for Value Added Tax (VAT) General Taxpayer Recognition" (the New Recognition Measures), which replace the old recognition measures issued in 1993.

Who is eligible for VAT general taxpayer status?
According to related regulations, the official thresholds for qualification as a VAT general taxpayer are:

• Manufacturing enterprises (enterprises engaged or mainly engaged in goods production or taxable service provision) with an estimated annual taxable turnover exceeding RMB500,000
• Other types of enterprises (enterprises where at least 50 percent of their income comes from the wholesale or retail of goods) with an estimated annual taxable turnover exceeding RMB800,000

The State Administration of Taxation (SAT) document “The Management Method of VAT General Taxpayer Qualification Verification (SAT Decree No.22)” stipulates that all applicants for general taxpayer status have to meet the following conditions to have their applications proceeding:

• Having fixed premises of production and operation
• Being able to establish account books according to the unified accounting system of the State, conduct accounting in light of valid and effective vouchers, and provide accurate tax information

How to apply for the general taxpayer status?
Businesses can only apply for the VAT general taxpayer status at the very end of the incorporation process, that is, once all the post-registrations are completed with the relevant government agencies/authorities. The procedures of application can vary from city to city, but the application process is largely as follows:

• Download the VAT General Taxpayer Application Form here and fill it out
• Submit the application form, required documents (see the list of required documents below) and processing fee of RMB50 to the local office of the SAT
• Applications are normally processed within 30 days of receipt, after which all documents will be returned
• Tax officials may interview the applicant and conduct working site inspection
• Successful applicants will be given a VAT General Taxpayer Verification Form to be completed and returned
• Fapiao purchase license will be issued and a fapiao printer can then be purchased

It should be noted that the general taxpayer status will be reviewed annually and applicants will not be reverted to small-scale taxpayer status in the future.

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