General

According to Huacheng Import and Export Data Observation, on the 9th, the Ministry of Finance and the State Administration of Taxation issued the Announcement on Clarifying the Policies of VAT Reduction and Exemption for Small-scale VAT Taxpayers.

The announcement proposes that from January 1, 2023 to December 31, 2023, small-scale VAT taxpayers with monthly sales of less than 100000 yuan (including this figure) will be exempted from VAT. Huacheng Import and Export Data Observation Report.

From January 1, 2023 to December 31, 2023, small-scale VAT taxpayers shall apply the taxable sales income at the rate of 3%, and the VAT shall be levied at the rate of 1%; For VAT withholding items with a 3% withholding rate, the VAT withholding rate will be reduced by 1%, Huacheng Import and Export Data Observation Report.

From January 1, 2023 to December 31, 2023, the value-added tax deduction policy shall be implemented according to the following provisions:

（1） Taxpayers of producer services are allowed to deduct the tax payable by 5% of the current deductible input tax. Taxpayers of productive services refer to taxpayers who provide postal services, telecommunications services, modern services and life services and whose sales account for more than 50% of the total sales.

（2） Taxpayers in the life service industry are allowed to deduct the tax payable by 10% of the current deductible input tax. Taxpayers in the life service industry refer to those taxpayers whose sales from providing life services account for more than 50% of the total sales.

（3） Other relevant matters for taxpayers to apply the policy of value-added tax deduction shall be implemented in accordance with the relevant provisions of the Announcement of the General Administration of Taxation of the Ministry of Finance on Deepening the Policy of Value-added Tax Reform (Announcement No. 39 of the General Administration of Taxation of the Ministry of Finance in 2019) and the Announcement of the General Administration of Taxation of the Ministry of Finance on Clarifying the Policy of Value-added Tax Deduction in the Living Service Industry (Announcement No. 87 of the General Administration of Taxation of the Ministry of Finance in 2019), Huacheng Import and Export Data Observation Report.

The announcement clearly states that the VAT that should be deducted or remitted according to the provisions of this announcement, which has been collected before the issuance of this announcement, can be deducted or refunded from the tax payable by the taxpayer in the later tax period, Huacheng Import and Export Data Observation Report.