On 27 August 2012, the State Administration of Taxation issued the announcement (“Announcement“) on matters relevant to the filing of value added tax (“VAT“) returns upon the change from business tax (“BT“) filings to VAT filings under the pilot scheme (“Pilot Scheme“) for 8 provinces and municipalities (国家税务总局关于北京等8省市营业税改征增值税试点增值税纳税申报有关事项的公告). The 8 provinces and municipalities are Beijing, Tianjin, and the Jiangsu Province, Anhui Province, Zhejiang Province (including Ningbo City), Fujian Province (including Xiamen City), Hubei Province and Guangdong Province (including Shenzhen City).
In fact, Shanghai was the first to commence implementation of the VAT tax reform, on 1 January 2012 (i.e. before the Announcement was issued). Each of the 8 provinces/municipalities under the Pilot Scheme is expected to have commenced implementation of the VAT tax reform at some point of time in the second half of 2012.
The Announcement focuses on the documents required for the proper filing of VAT returns, differentiating between VAT filing by a general VAT payer, and VAT filing by a small-scale VAT payer. The two types of VAT filing forms are otherwise similar to those VAT filing forms that have been in use all along.
For taxpayers who are used to BT filings only, they will need to familiarize with the VAT forms, to ensure correct and proper VAT filings, whether as a general VAT payer or a small-scale VAT payer.
All the VAT taxpayers within the jurisdictions of the eight provinces and municipalities are required to file their VAT returns as from the taxable month in which the Pilot Scheme takes effect. The date on which the Pilot Scheme shall take effect for each of the 8 regions is as follows:
Proper and correct VAT filings, with all the filing requirements duly met, are important, particularly in the case of general VAT payers who would want to be certain that their input VAT could be offset against the output VAT. It is thus important for all affected taxpayers to pay close attention to all the rules and regulations applicable to VAT filings, and seek advice on the matter where necessary.