Hot issues on the collection and management of financial reimbursement and sales returns

If it is necessary to use fully digitalized e-invoices bearing the words "Air Transport Electronic Ticket Itinerary"”For fully digitalized e-invoices bearing the words "railway electronic ticket" used for tax deduction, pre-tax deduction, and financial reimbursement, how should the fully digitalized e-invoice be issued?？

Currently, fully digitalized e-invoices bearing the words Aviation Transport Electronic Ticket Itinerary or Railway Electronic Ticket include the Buyer Name and its Unified Social Credit Code. If they are to be used for tax deduction, pre-tax deduction, and financial reimbursement, the information of the unit using the invoice for tax deduction, pre-tax deduction, and financial reimbursement should be filled in the Buyer Name and its Unified Social Credit Code fields, and after issuance, the invoice should be delivered directly to the corresponding unit's tax digital account. Relevant traveler information is displayed in the passenger information column (section）Display.

If a sales return or sales allowance occurs after a taxpayer issues an invoice, how is the original invoice handled?

I.According to the Decision of the State Taxation Administration on Amending the Detailed Rules for the Implementation of the Measures of the People's Republic of China for the Administration of Invoices(State Taxation Administration Order No. 56):

Article 26

After issuing a paper invoice, if sales returns, invoicing errors, suspension of taxable services, or other circumstances occur and the invoice needs to be voided, all copies of the original invoice shall be recovered and marked with the words "void" before voiding the invoice.

After issuing a paper invoice, if sales returns, invoicing errors, suspension of taxable services, sales discounts, or other circumstances occur and a red-letter invoice needs to be issued, all copies of the original invoice shall be recovered and marked with the words "red-letter reversal" before issuing the red-letter invoice. If all copies of the original invoice cannot be recovered, the red-letter invoice shall be issued after obtaining valid proof from the other party.

Article 27

After issuing an electronic invoice, if sales returns, invoicing errors, suspension of taxable services, sales discounts, or other circumstances occur, a red-letter invoice shall be issued in accordance with regulations.

II.According to the Measures for the Management of Online Invoices(State Taxation Administration Order No. 30)

Article 8 provides

Where units and individuals that issue invoices need to issue red-ink invoices, they must recover all copies of the original online invoice or obtain valid proof issued by the invoice recipient, and issue a red-ink online invoice with a negative amount through the online invoice management system.

Article 9 stipulates

Units and individuals that issue invoices and void issued online invoices shall recover all copies of the original online invoice, mark them "void," and process the invoice voiding in the online invoice management system.

According toAnnouncement of the Beijing Municipal Tax Service, State Taxation Administration on Carrying Out the Pilot of Fully Digitalized Electronic Invoices(Announcement No. 3 of 2023 of the Beijing Municipal Tax Service, State Taxation Administration)

12. If a pilot taxpayer encounters circumstances such as incorrect invoicing, sales returns, service suspension, or sales discounts and needs to issue a red-letter fully digitalized e-invoice or red-letter paper invoice through the electronic invoice service platform, the following provisions shall apply:

(1) If the invoice recipient has not confirmed the use or accounting entry, after the invoice issuer fills out and submits the "Red-Letter Invoice Information Confirmation Form" (hereinafter referred to as the "Confirmation Form", see Appendix 2), the electronic invoice service platform shall automatically issue a full red-letter fully digitalized e-invoice based on the Confirmation Form, or the invoice issuer shall issue a full red-letter paper invoice, without confirmation by the invoice recipient.

(2) Where the invoice recipient has already confirmed the use or recorded it in the accounts, the invoicing party or the invoice recipient may fill in and submit the Confirmation Form, and after confirmation by the other party, the electronic invoice service platform shall automatically issue a red-letter fully digitalized e-invoice based on the Confirmation Form, or the invoicing party shall issue a red-letter paper invoice.

If the invoice recipient has already used the invoice for VAT declaration and deduction, it shall temporarily transfer the VAT amount listed in the Confirmation Form out of the current period's input tax; after obtaining the red-letter invoice issued by the issuer, it shall be used together with the Confirmation Form as an accounting voucher.

Source: Beijing Tax

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