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China’s State Administration of Taxation (SAT) has published new regulations for collecting fapiaos. Beginning from 1 July 2017, taxpayers need to provide their tax identification number (TIN) for obtaining a fapiao.

 

Under the new regulation, more information is required for requesting a fapiao. Below you can find an overview of the newly required information:

  

General VAT fapiao

Special VAT fapiao

Company’s full Chinese name

Buyer’s correct and full information on the upper left side: Chinese company name, TIP or unified social credit code, address, telephone number, bank name and account number

TIN or unified social credit code

Fapiao passcode 

Fapiao content according to the actual transaction 

Commodity and service tax breakdown 

Issuer’s special fapiao chop

Fapiao content according to the actual transaction

 

Issuer’s special fapiao chop

 

This new regulation does not count for natural persons, political departments, foreign customers, unions, state organs and the army. For ensuring, that there will be no errors made while issuing a fapiao, service providers need to link their internal system with the SAT’s VAT control system. This exactly means that the fapiao is only valid if the data is entered in both systems.

 

With the new law, the fapiao issuing business has to specify the purpose of the expenditure and is not allowed to simply follow the costumer’s request. This makes it difficult for taxpayers to issue fapiaos falsely requested for other purposes. At the same time, taxpayers can only claim tax refunds for transactions which are in accordance with the actual fapiao content.

 

Validity of fapiaos

 

A special VAT Fapiao issued before 1 July 2017 will not be deductible if it is not verified within 180 days after the issue. Also, taxpayers must submit their fapiao until 30 days before the expiration date to reclaim the expense.

 

For fapiaos issued after 1st July 2017, taxpayers have to keep the special VAT Fapiao and the invoice copies which will be issued together in order to prove the fapiao’s validity. The special fapiao will not be valid if it hasn’t been verified and filed for a VAT return within 360 days. If a fapiao will be issued without the above information it will be treated as invalid.

 

However, Fapiaos for personal purchases do not require your personal identification number.    

 

It is highly recommended that taxpayers and vendors get familiar with the new regulations to know how it affects the own business. It is also recommended to inform relevant HR and finance staff about the new regulations and to adjust internal rules for the reimbursement of business expenses.

 

 

 Elizabeth 150x225  

Elizabeth Shi

Elizabeth Shi is a Senior Tax Manager at Ecovis Beijing. She has over 10 years of working experience in China´s legal, tax and business field. Prior to joining Ecovis, Elizabeth has worked in the Big Four accounting firms’ tax and business advisory departments. She has advised companies on various China tax and legal related matters, including dealing with tax and other government authorities. Her expertise covers tax compliance, restructuring, M&A, tax due diligence, liquidation and deregistration related tax matters as well as tax planning for companies and individual expatriates. Elizabeth started her professional career as a legal consultant in a prestigious IP firm, working on foreign direct investment (FDI) and intellectual property (IP) projects. With her legal background both in academics and in practice, she has a profound understanding of China’s tax system and its operation. For further information please contact:This email address is being protected from spambots. You need JavaScript enabled to view it.

Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up to our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via This email address is being protected from spambots. You need JavaScript enabled to view it..
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