What invoices can resource recycling enterprises implementing "reverse invoicing" issue?

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.

What invoices can resource recycling enterprises implementing "reverse invoicing" issue? Let's find out together↓

Q: What invoices can resource recycling enterprises implementing "reverse invoicing" issue?

Answer:Considering that taxpayers need invoices for pre-tax deduction of income tax, and taxpayers applying the general VAT calculation method also need VAT special invoices to deduct input tax, in practice, if a resource recycling enterprise is a general VAT taxpayer applying the general VAT calculation method, it may issue VAT special invoices and ordinary invoices in reverse; if it is a small-scale VAT taxpayer, or a general VAT taxpayer that has chosen to apply the simplified VAT calculation method, it may issue ordinary invoices in reverse but may not issue VAT special invoices in reverse. If a resource recycling enterprise selling scrapped products changes its VAT calculation method, it shall apply to adjust the invoice type for "reverse invoicing" and correctly issue invoices according to the chosen applicable VAT calculation method. Resource recycling enterprises may deduct the tax amount indicated on VAT special invoices issued in reverse in accordance with regulations.

Scenario 1:Resource recycling enterprise Company A is a general VAT taxpayer, chooses to apply the general VAT calculation method for sales of end-of-life products, and has obtained the "reverse invoicing" qualification. In June 2024, Company A purchased waste plastics from individual Jia, who sells end-of-life products, with a purchase amount of 2.02 million yuan. For the above purchase business, Company A chose to issue a special VAT invoice in reverse, noting a tax-exclusive sales amount of 2 million yuan and tax of 20,000 yuan. Then, when calculating the VAT payable for the period to which June 2024 belongs, Company A may deduct the above input tax of 20,000 yuan according to regulations.

Scenario 2:Resource recycling enterprise Company A is a general VAT taxpayer, chooses to apply the simplified VAT calculation method for sales of end-of-life products, and has obtained the "reverse invoicing" qualification. In July 2024, Company A purchased waste plastics from individual Jia, who sells end-of-life products, with a purchase amount of 1.01 million yuan. For the above purchase business, because Company A has chosen to apply the simplified VAT calculation method, it may only issue a general invoice in reverse to individual Jia and may not issue a special VAT invoice in reverse.

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