This is a re-published article after improving it. The content is mainly updated according to the new policy. At the same time, it also supplements and improves the "phased tax incentives for small-scale VAT taxpayers" and "sales of your own used products". "The Difference Between Assets and Selling Used Goods" related content.
Enterprises sell their used "old fixed assets and other items" other than intangible assets and real estate. The policy on how to pay VAT is very fragmented. Many people just read this but not that. Either the discount is not used or the invoice is used. Wrong drive. I hope that today’s analysis can help you clarify your thinking.
1. Overview of VAT payment and invoicing policies
Although there are many documents involved, the most basic ones are Finance and Taxation [2009] No. 9 and State Administration of Taxation Announcement 2012 No. 1, which stipulate that enterprises sell their used fixed equipment How to determine whether assets and other items are subject to the simplified method. Then you can look at the tax calculation methods and tax rate adjustment provisions in the State Administration of Taxation Announcement No. 36 of 2014, the provisions on invoices in the State Administration of Taxation [2009] No. 90 and the State Administration of Taxation Announcement No. 90 of 2015. . The picture below shows the VAT payment and invoicing regulations sorted out based on these policies.
2. Phased tax incentives for small-scale VAT taxpayers
Starting from 2019, there will be a policy of exempting VAT from small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (inclusive). Starting from April 2021, the monthly sales standard will be raised to 150,000 yuan, and the discounts for small-scale taxpayers will be further increased in 2022. According to the provisions of Announcement No. 15 of 2022 of the Ministry of Finance and the State Administration of Taxation: "From April 1, 2022 to December 31, 2022, small-scale value-added tax taxpayers shall apply a 3% taxable sales income , Exempted from VAT”.
If small-scale taxpayers want to dispose of their used assets, they can take advantage of this year's good opportunity without paying VAT. Of course, if the asset buyer requires the seller to provide special invoice , according to the provisions of Article 1 of the State Administration of Taxation Announcement No. 6 of 2022, the seller can still pay tax at a 3% tax rate and issue a special invoice despite giving up tax exemption. .
In addition, due to the epidemic, from March 1, 2020 to March 31, 2022, small-scale taxpayers will be subject to a 3% tax rate on taxable sales income, and a reduced rate of 1% will be levied on value-added tax and can be levied at a reduced rate of 1%. The 1% policy of issuing special invoices is also applicable to the sale of used assets. I don’t know if this policy will continue to exist in the future.
3. The difference between selling your own used assets and selling used goods
When taxpayers sell used goods, they are also subject to a 3% tax rate reduced to a 2% tax rate to pay value-added tax. However, there is no clear provision to give up the tax reduction. They can pay the value-added tax at a tax rate of 3%. % tax collection rate and the policy of issuing special invoices. However, if you sell your own used items other than fixed assets, except for the periodic value-added tax discount, there is no VAT discount applicable to the 3% tax rate or the 2% tax rate.
Some companies often apply the wrong tax rate because they confuse their used items with second-hand goods. According to the provisions of Article 2, Paragraph 2 of Finance and Taxation [2009] No. 9: "The so-called used goods refer to goods with partial use value (including old cars, old motorcycles and old yachts) that enter secondary circulation. But does not include items that have been used by themselves.”htm. l3
Here we will add some periodic value-added tax preferential policies for second-hand car distribution companies. From May 1, 2020 to December 31, 2023, taxpayers engaged in second-hand car distribution business will be exempted from the used car sales they acquired. Value-added tax is levied at a rate of 0.5%, and taxpayers must issue a unified invoice for second-hand car sales. If the purchaser requests a special value-added tax invoice for or , it shall issue a special value-added tax invoice with a tax rate of 0.5%.
4. Problems in practice
There is a problem that is not covered by the existing documents, which will cause general taxpayers to have no input tax to deduct when selling other items they have used, and now they have to pay 13% value-added tax.
This is: if general taxpayers have items that are suitable for simplified tax calculation, then the input of other items purchased by them for simple tax calculation items must be transferred out. When companies want to sell these items again after a period of time, they find that they have to pay value-added tax as a general taxpayer. However, because the input tax was transferred out at the beginning, there is no input tax to offset these items.
Regarding this issue, the tax bureau has different opinions: some directly say that output tax has to be paid, and there is no input tax; some ask people to go to the lobby to change the number, and let the transferred input tax be transferred in again; and others Some people think that enterprises should not have checked the certification on the invoice platform in the first place. They should check the certification now when selling, so that the enterprise will not have the troubles it has now. It is recommended that if companies really face this problem, they must have a thorough understanding of local law enforcement standards to avoid unnecessary tax disputes.
5. Policies related to this article
" Interim Regulations of the People's Republic of China on Value-Added Tax " (Adopted by the 191st Executive Meeting of the State Council) Article 15
" Implementation Rules for the Interim Regulations of the People's Republic of China on Value-Added Tax " (Ministry of Finance and National Taxation General Administration Order No. 50) Article 35
"Ministry of Finance Notice of the State Administration of Taxation on Several Issues Concerning the National Implementation of Value-Added Tax Transformation Reform (Finance and Taxation [2008] No. 170) Article 4
"Ministry of Finance Notice of the State Administration of Taxation on the application of low VAT rates and simplified VAT collection policies for some goods" (Finance and Taxation [2009] No. 9) Article 2
"Notice of the State Administration of Taxation on Management Issues Concerning the Simple VAT Collection Policy" ( National Tax Letter〔2009 〕No. 90) Articles 1 and 2
"Announcement of the State Administration of Taxation on Issues Concerning Value-Added Tax on the Sales of Used Fixed Assets by General Taxpayers" (Announcement of the State Administration of Taxation 2012 No. 1
"Ministry of Finance Notice of the State Administration of Taxation on the Simplification of Value-Added Tax Collection Rate Policies" (Caishui [2014] No. 57) Article 1
"Announcement of the State Administration of Taxation on Issues Concerning the Simplification of Value-Added Tax Collection Rates" (State Administration of Taxation Announcement No. 2014 of the State Administration of Taxation) No. 36) No. Articles 3, 5 and 6
"Announcement of the State Administration of Taxation on Value-Added Tax Issues During the Pilot Period of Replacing Business Tax with Value-Added Tax" (State Administration of Taxation Announcement No. 90, 2015) Article 2
"The Ministry of Finance Announcement of the State Administration of Taxation on Clarifying the VAT Exemption Policy for Small-scale Value-Added Taxpayers" (Announcement No. 11 of the Ministry of Finance and the State Administration of Taxation of 2021)
"Announcement of the Ministry of Finance and the State Administration of Taxation on the VAT Policy for Supporting the Resumption of Work of Individual Industrial and Commercial Households" ( Ministry of Finance and State Administration of Taxation Announcement No. 13 of 2020) (Ministry of Finance Announcement No. 15 of the State Administration of Taxation of 2022 extending this discount until the end of March 2022)
"Announcement of the Ministry of Finance and the State Administration of Taxation on Exempting Small-scale Value-Added Taxpayers from VAT" (Ministry of Finance Announcement of the State Administration of Taxation No. 15 of 2022)
"Announcement of the State Administration of Taxation on Exemption of Small-scale Taxpayers from Value-Added Tax and Other Collection Management Matters" (Announcement of the State Administration of Taxation No. 6 of 2022)
"Announcement of the State Administration of Taxation on Second-hand Cars by the Ministry of Finance and the State Administration of Taxation Announcement on Value-Added Tax Policies for Distribution (Ministry of Finance State Administration of Taxation Announcement No. 17 of 2020)
"Announcement of the State Administration of Taxation on Clarifying Certain Value-Added Tax Collection and Administration Issues in Second-hand Car Distribution and Other Issues" (State Administration of Taxation Announcement No. 9 of 2020) Article 1
