Latest tax bureau regulation in 2024: fully digitalized e-invoices with incomplete remarks columns will all be returned!

The "remarks column" of fully digitalized e-invoices is a rather troublesome issue for accountants. When designed, the remarks column was intended to let enterprises disclose more business information, give tax authorities more basis for judging enterprise economic matters, and help standardize the invoice market.

However, because the provisions on the "remarks column" are scattered across various regulations, different businesses have different requirements for the remarks column. For example, five specific types of business must fill in the remarks column as required. If not filled in as required, it constitutes false issuance of VAT invoices, and the invoice is not allowed for input VAT deduction or pre-tax deduction. Most industries have no requirements for remarks, so many accountants do not fill in the remarks column.

After the launch of fully digitalized e-invoices, are there new rules for filling in the remarks column? What risks arise if it is not filled in?

I. Does the remarks column of a fully digitalized e-invoice still need to be filled in?

There are two cases

First type: If laws and regulations have clear format requirements, they must be filled in according to the correct format.If the filling format is incorrect or the remarks are not filled in and the tax authority determines it to be a "false issuance," VAT deduction is not allowed, nor is pre-tax deduction permitted.

Second: If regulations do not specify a mandatory format, it is recommended to fill it in.Remarks serve as an information link between the invoice and the real business, and are also one of the guiding pieces of information proving the authenticity of the business. Supporting information related to the real business should be filled in as much as possible.

According to the regulatory requirements of the remarks column tax law for the construction industry, obtaining non-compliant invoices for construction services will result in VAT input tax not being deductible, income tax not being deductible pre-tax, and if land VAT is involved, it cannot be included in land VAT deduction items, and may also bring risks such as fines and tax supplements:

1. When the seller issues a construction services invoice,Fully digitalized e-invoices have specific columns set on the invoice face, including the remarks column. During the invoicing process, these specific columns must be filled in, otherwise the invoice cannot be issued.: It is just that when issued it does not display in the "remarks column" but displays elsewhere on the invoice face.

2. The "cross-region (city)" flag selection on construction service fully digitalized e-invoices is used to distinguish whether it belongs to a cross-region project, and withRelated to cross-region reporting and verification and prepayment of taxes。Therefore, when issuing fully digitalized e-invoices (construction services), a dropdown box must be used: for local construction projects, select "No" for the cross-region (city) marker; for cross-city construction projects, select "Yes."

Risk alert: policies and filing practices for cross-region construction tax matters, etc.

3. Construction service fully digitalized e-invoice: the "Specification/Model," "Unit," "Fully Digitalized," and "Unit Price" columns are all gray, indicating they do not need to be filled in.

II. New rules for the remarks column in 2024!

How should the remarks column of a fully digitalized e-invoice be filled in?

Fully digitalized e-invoices can be issued directly through the 'Electronic Tax Bureau', among which there are5 specific businesses, its corresponding "remarks information" is a required field (Cannot issue an invoice without filling it in), including: construction services, freight transport services, real estate sales, real estate operating lease services, and passenger transport services.

01、 Construction services

Mandatory content in the remarks column of construction service invoices includes [Place where construction services occur] [Construction project name] [Cross-region (city) flag].

02、 Goods transportation services

Required contents in the remarks column of goods transportation services include [Type of transport vehicle][License plate number of transport vehicle][Place of departure][Destination][Name of transported goods].

(for reference only)

03、 Real Estate Sales

Mandatory items in the remarks column for real estate sales include [Real Estate Address] [Area Unit] [Cross-region (City) Marker].

04、 Real estate operating lease services.

Required contents in the remarks column of real estate operating lease service invoices include [real estate address] [lease term start and end] [cross-region (city) marker] [property ownership certificate/real estate title certificate number] [area unit].

(for reference only)

05、 Tourism transport services

Passenger transport services have no required information; taxpayers fill in departure place, arrival place, means of transport, and other information according to their own needs.

III. Non-standard remarks column entries? Please note these four major risks!

01、 Violation of Invoice Management Measures

Invoices shall be issued truthfully in one go for all copies in accordance with the prescribed time limits, order, columns, and content, and shall be stamped with the special invoice seal. Invoices issued by the issuer that do not comply with regulations shall not be used as financial reimbursement vouchers, and any unit or individual has the right to refuse them.

Obtaining an invoice without remarks as required clearly constitutes obtaining non-compliant vouchers, violates invoice management regulations, and the tax authority will order correction; the tax authority may also impose penalties in accordance with the Measures of the People's Republic of China for Invoice Management. (For specific policies, please refer to -- Measures of the People's Republic of China for Invoice Management)

02、 VAT risk

When an enterprise purchases goods, labor services, services, intangible assets, or real estate, if the VAT deduction vouchers obtained do not comply with laws and administrative regulations, the input tax amount may not be deducted from the output tax amount. If the enterprise has already deducted it, it needs to make a VAT input tax transfer-out.

03、 Corporate Income Tax

Invoices obtained by an enterprise that are filled out irregularly or do not comply with regulations shall not be used as pre-tax deduction vouchers for enterprise income tax and cannot be deducted before enterprise income tax.

04、 Land value-added tax risk

A land value-added tax taxpayer that receives VAT invoices for construction and installation services shall indicate in the remarks column of the invoice the name of the county (city, district) where the construction service occurred and the project name; otherwise, it shall not be included in the deductible items for land value-added tax.

Source: internet

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