Who are included as individual sellers of end-of-life products in the "reverse invoicing" policy for resource recycling enterprises?

The State Taxation Administration recently issued the Announcement on Matters Concerning "Reverse Invoicing" by Resource Recycling Enterprises to Individual Sellers of Scrap Products (Announcement No. 5 of 2024 of the State Taxation Administration), clarifying that from April 29, 2024, when individual sellers of scrap products sell scrap products to resource recycling enterprises, eligible resource recycling enterprises may issue invoices to the sellers (referred to as "reverse invoicing"), adding impetus, improving efficiency and optimizing the environment for promoting large-scale equipment renewal and trade-in of consumer goods.

Who are included as individual sellers of scrapped products? Are individuals who purchase scrapped products and then resell them included? Let's find out together↓　

Q: Who are included as sellers of scrapped products by natural persons? Are natural persons who purchase scrapped products and then resell them included?

Answer:According to current invoice management system provisions, general VAT taxpayers and small-scale taxpayers selling scrapped products may issue invoices themselves; natural persons selling scrapped products (including selling scrapped products they have used themselves or selling acquired scrapped products) may apply to tax authorities for agency invoice issuance, already achieving coverage of compliant invoice issuance and receipt in the circulation of scrapped products. Announcement No. 5 implements the decisions and arrangements of the Party Central Committee and the State Council and implements "reverse invoicing" by resource recycling enterprises to natural person sellers of scrapped products, in order to further enhance the convenience for resource recycling enterprises to obtain invoices when purchasing scrapped products from natural persons.

The natural person seller of scrapped products referred to in Announcement No. 5 (hereinafter referred to as the seller) includes both natural persons selling scrapped products they have used themselves and natural persons selling scrapped products they have purchased. In addition, the natural person shall meet the condition that the cumulative sales amount of "reverse invoicing" for no more than 12 consecutive months does not exceed 5 million yuan. The cumulative sales amount of "reverse invoicing" here includes the sales amount of "reverse invoicing" by multiple resource recycling enterprises to the same natural person.

To regulate market and tax order, Announcement No. 5 also provides that where an individual's cumulative sales amount of scrapped products under "reverse invoicing" exceeds 5 million yuan over 12 consecutive months, the resource recycling enterprise may no longer issue "reverse invoices" to them. Resource recycling enterprises shall guide individuals continuously engaged in the business of selling scrapped products to register as business entities in accordance with the law and issue invoices themselves in accordance with regulations.

Content source: State Taxation Administration

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