Notice of the Ministry of Finance and the State Administration of Taxation on th

[2009-01-16 16:52:41]

Notice of the Ministry of Finance and the State Administration of Taxation on the VAT Policies on Renewable Resources

Promulgation date:	12-09-2008	Department:	Ministry of Finance, State Administration of Taxation
Effective date:	01-01-2009	Subject:	New Taxation

Notice of the Ministry of Finance and the State Administration of Taxation on the VAT Policies on Renewable Resources
(No.157 [2008] of the Ministry of Finance)

The public finance departments (bureaus) and state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; the financial supervision commissioner’s offices of the Ministry of Finance in all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; and the Public Finance Bureau of Xinjiang Production and Construction Corps:

To promote the recycle of renewable resources, enhance the healthy and orderly development of the renewable resource recycling industry, save resources, protect the environment, and make the tax regime more equitable and normative, upon the approval of the State Council, we decided to adjust the VAT policies on the recovery and utilization of renewable resources as follows:

I. The policy of “exempting waste and used material recovery business operators from the VAT on selling the waste and used materials purchased by them” and the policy that “for the waste and used materials purchased by producing enterprises of ordinary VAT taxpayers from waste and used material recovery business operators, the input tax to be deducted shall be 10% of the amount indicated in the plain invoice manufactured under the supervision of the taxation authorities as issued by waste and used material recovery business operators” shall be cancelled.

II. Entities and individuals selling renewable resources shall pay VAT according to the Interim Regulation of the People’s Republic of China on VAT, the Detailed Rules for the Implementation of the Interim Regulation of the People’s Republic of China on VAT and the relevant provisions of the Ministry of Finance and the State Administration of Taxation. However, individuals (not including individual industrial and commercial households) are exempted from VAT for selling the waste and used articles of their own. Ordinary VAT taxpayers who purchase renewable resources shall have the input tax deducted upon the strength of the tax deduction voucher as prescribed in the Interim Regulation on VAT and the Detailed Rules for the Implementation of the Interim Regulation on VAT. The VAT invoices with the characters “waste and used materials” shall not be used any more, and cannot be used as tax VAT　deduction vouchers for deducting input tax.

III. Before December 31, 2008, the taxation authorities of all local regions shall write off enterprises’ archival information about “waste and used material recovery business operators” in the anti-forgery tax control system, take back the VAT invoices which enterprises have not issued yet, re-verify enterprises’ maximum invoice amount of VAT invoices and the maximum quantity of invoices that they can purchase, and do a good job in selling VAT invoices.

IV. Before the end of 2010, the policy of collection before refund shall apply to the VAT paid by qualified ordinary VAT taxpayers for selling renewable resources.

a. Scope of taxpayers to which the tax refund policy is applicable

An ordinary VAT taxpayer to which the tax refund policy is applicable shall satisfy the following requirements simultaneously:
1. it has handled the archive-filing formalities at the competent department if it is required to do so according to Article 7 or 8 of the Administrative Measures for the Recovery of Renewable Resources (Order No.8 [2007] of the Ministry of Commerce);
2. it has fixed places for storing, sorting out and processing renewable resources;
3. the sales amount of renewable resources that has been settled through financial institutions accounts for 80% or more of the total sales amount of renewable resources; and
4. ever since January 1, 2007, it has not received any criminal punishment due to its violation of the Anti-money Laundering Law of the People’s Republic of China, the Environmental Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Administration of Tax Collection, the Measures of the People’s Republic of China for the Administration of Invoices or the Administrative Measures for the Recovery of Renewable Resources or any administrative punishment (excluding admonitions and fines) given by the industrial and commercial department, commerce department, environmental protection department, taxation department or public security organ at or above the county level.

b. Tax refund proportion

For the VAT paid by taxpayers that satisfy the requirements for tax refund for selling renewable resources in 2009, 70% thereof shall be refunded to them. For the VAT paid by them for selling renewable resources in 2010, 50% thereof shall be refunded to them.

c. To apply for tax refund, a taxpayer shall submit the following materials in addition to those required by the relevant provisions:

1. if it is required to handle the archive-filing formalities at the competent department according to Article 7 or 8 of the Administrative Measures for the Recovery of Renewable Resources, a photocopy of the archive-filing registration certificate issued by the administrative department of commerce shall be submitted;
2. a photocopy of the certificate of land use for the place for storing, sorting out and processing renewable resources and a photocopy of the title deed or lease contract;
3. the relevant data and materials about the sales amount of renewable resources that has been settled through financial institutions and the total sales amount of renewable resources (for the purpose of protecting the trade secrets of taxpayers, taxpayers are not required to submit the detail records of their bank transactions with clients, so any party which has any doubt about any taxpayer may go to the location of the taxpayer to verify on the spot); and
4. a written declaration on the fact that, ever since January 1, 2007, it has not received any criminal punishment due to violation of the Anti-money Laundering Law of the People’s Republic of China, the Environmental Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Administration of Tax Collection, the Measures of the People’s Republic of China for the Administration of Invoices or the Administrative Measures for the Recovery of Renewable Resources or any administrative punishment (excluding admonitions and fines) given by the industrial and commercial department, commerce department, environmental .....