Comprehensive Q&A! Interpreting the VAT Input Tax Deduction Policy for Passenger Transport Services

To facilitate taxpayers, fee payers, and grassroots tax authorities in consulting relevant policy response calibers, the State Taxation Administration comprehensively reviewed and confirmed the Q&A published externally from January 2019 to July 2024, and compiled the "Compilation of Q&A on a Series of Tax and Fee Support Policies Since 2019," covering 8 major categories, 34 special topics, and 294 currently effective response calibers. Today, learn about VAT input tax deduction policy for passenger transport services Related Q&A.

[Question 1] Can a general VAT taxpayer deduct input VAT when purchasing domestic passenger transport services?

Answer:Yes. Since April 1, 2019, for VAT general taxpayers purchasing domestic passenger transport services, the input tax amount is allowed to be deducted from the output tax amount.

[Question 2] Can a general VAT taxpayer deduct input VAT when purchasing international passenger transport services?

Answer:No. Taxpayers providing international passenger transport services are subject to a zero VAT rate or exemption policy. Accordingly, purchasing international passenger transport services cannot be deducted as input VAT.

[Question 3] How is the input VAT calculated when a general VAT taxpayer purchases domestic passenger transport services and obtains a VAT electronic ordinary invoice?

Answer:Where a general VAT taxpayer purchases domestic passenger transport services and obtains a VAT electronic ordinary invoice, the input tax shall be the tax amount stated on the invoice.

[Question 4] How is the input VAT calculated when a general VAT taxpayer purchases domestic passenger transport services and obtains an air transport electronic itinerary receipt?

Answer:For air transport electronic ticket itineraries obtained that indicate passenger identity information, input VAT shall be calculated according to the following formula: air passenger transport input VAT = (fare + fuel surcharge) ÷ (1+9%) × 9%.

[Question 5] How is the input VAT calculated when a general VAT taxpayer purchases domestic passenger transport services and obtains a railway ticket?　　Answer:For railway tickets obtained that indicate passenger identity information, input VAT shall be calculated according to the following formula: railway passenger transport input VAT = face amount ÷ (1+9%) × 9%.

[Question 6] How is the input VAT calculated when a general VAT taxpayer purchases domestic passenger transport services and obtains highway, waterway and other passenger tickets?　　Answer:For highway, waterway, and other passenger tickets obtained that indicate passenger identity information, input VAT shall be calculated according to the following formula: highway and waterway passenger transport input VAT = face amount ÷ (1+3%) × 3%.

[Question 7] Company E paid a ticket refund fee to an airline agency due to the cancellation of an employee's business trip and obtained a special VAT invoice at the 6% tax rate. Can Company E deduct this input VAT?

Answer:According to current policy provisions, the ticket refund fee charged by an air agency company falls within the scope of taxation for modern services and shall be subject to VAT at the 6% rate. The ticket refund fee paid by Company E for official business falls within the scope of deductible input tax, and the tax amount indicated on its special VAT invoice may be deducted from output tax.

[Question 8] Can the input VAT be deducted for passenger transport expenses paid by a taxpayer for non-employees (such as customers, invited lecture experts, and other personnel with a business cooperation relationship)?

Answer:The Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning Deepening VAT Reform (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs) provides that where a general VAT taxpayer purchases domestic passenger transport services, the input tax amount is allowed to be deducted from the output tax amount. This refers to domestic passenger transport expenses incurred by employees who have established a lawful employment relationship with the unit, whose input tax amount is allowed to be deducted. If a taxpayer pays passenger transport expenses for non-employees, they cannot be included in the deduction scope. It should be noted that the above deductible input tax amount must be used for production and operation needs; if it belongs to collective welfare or personal consumption, its input tax amount may not be deducted from the output tax amount.

[Question 9] Can a long-distance passenger hand-torn ticket obtained by a unit be used to deduct input VAT?

Answer:The Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning Deepening VAT Reform (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs) provides that where a general VAT taxpayer purchases domestic passenger transport services, in addition to obtaining VAT special invoices and VAT electronic general invoices, it must rely on air transport electronic ticket itineraries, railway tickets and other tickets such as road and waterway tickets indicating passenger identity information to deduct the input tax amount; other tickets that do not indicate passenger identity information (handwritten ones are invalid) are temporarily not allowed to serve as tax deduction vouchers. Therefore, a taxpayer cannot deduct the input tax amount on the basis of a hand-torn long-distance passenger ticket.

[Question 10] Starting from April 1, 2019, the input VAT on domestic passenger transport services purchased by taxpayers is allowed to be deducted. For VAT electronic ordinary invoices obtained, as well as air transport electronic itinerary receipts, railway tickets, highway, waterway and other passenger tickets indicating passenger identity information, what is the deduction period?

Answer:Since April 1, 2019, input VAT on domestic passenger transport services purchased by taxpayers is allowed to be deducted. Since March 1, 2020, general taxpayers that obtain eligible deduction vouchers are no longer subject to deadlines for verification and confirmation, audit comparison, and filing for deduction.

[Question 11] After April 1, 2019, if a taxpayer purchases domestic passenger transport services and obtains a VAT ordinary invoice (not a VAT electronic ordinary invoice), is the input VAT allowed to be deducted from the output VAT?

Answer:The Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning Deepening VAT Reform (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs) provides that the domestic passenger transport service vouchers for which the input tax amount is allowed to be deducted are, apart from VAT special invoices, limited only to VAT electronic general invoices and air transport electronic ticket itineraries, railway tickets, and other tickets such as road and waterway tickets indicating passenger identity information. VAT general invoices are not included.

[Question 12] Company C plans to purchase 20 round-trip tickets from "Shanghai—Sanya" to reward its outstanding employee team. Can Company C deduct the input VAT corresponding to the ticket purchase expense from the output VAT?

Answer:According to Article 27(1) of the Measures for the Implementation of the Pilot Program for Replacing Business Tax with Value-Added Tax (issued by Cai Shui [2016] No. 36), input tax on goods, processing and repair services, services, intangible assets, and real estate purchased by a taxpayer for collective welfare or personal consumption items shall not be deducted from output tax. The 20 airline tickets used by Company C to reward employees belong to collective welfare items, and the corresponding input tax shall not be deducted from output tax.

【Question 13] Can taxpayers deduct input tax for domestic passenger transport services purchased? How to deduct?

Answer:Article 6 of the Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning Deepening VAT Reform (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs) provides that for domestic passenger transport services purchased by a taxpayer, the input tax amount is allowed to be deducted from the output tax amount. Where the taxpayer obtains a VAT special invoice, the input tax amount is the tax amount indicated on the invoice. Where the taxpayer has not obtained a VAT special invoice, the input tax amount is determined temporarily according to the following provisions: (1) where a VAT electronic general invoice is obtained, it is the tax amount indicated on the invoice; (2) where an air transport electronic ticket itinerary indicating passenger identity information is obtained, the input tax amount is calculated according to the following formula: input tax on air passenger transport = (fare + fuel surcharge) ÷ (1+9%) × 9%; (3) where a railway ticket indicating passenger identity information is obtained, the input tax amount is calculated according to the following formula: input tax on railway passenger transport = face amount ÷ (1+9%) × 9%; (4) where other tickets such as road and waterway tickets indicating passenger identity information are obtained, the input tax amount is calculated according to the following formula: input tax on other passenger transport such as road and waterway = face amount ÷ (1+3%) × 3%.

[Question 14] A senior executive of Company B is a foreign national. On a business trip, he obtained a domestic railway ticket indicating passport information. Can Company B deduct the input VAT on this passenger transport expense?

Answer:Article 6 of the Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Policies Concerning Deepening VAT Reform (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs) provides that where a taxpayer purchasing domestic passenger transport services obtains a railway ticket indicating passenger identity information, the input tax amount is allowed to be deducted from the output tax amount. The railway ticket indicating passport information obtained by the senior executive of Company B may, in accordance with the provisions, be used to deduct the input tax amount.

[Question 15] How should an airline providing domestic passenger transport services issue a VAT electronic ordinary invoice for the civil aviation development fund collected together with the ticket fare?

Answer:In the Table of Tax Classification Codes for Goods and Services, under the non-taxable item category, code 6130000000000000000 is "Civil Aviation Development Fund Collected on Behalf." Civil aviation development funds collected by airlines on behalf of others when providing domestic passenger transport services may be invoiced using this code for VAT electronic ordinary invoices.

[Question 16] Can the electronic ordinary invoice for agency passenger transport expenses, issued at the 6% tax rate by ticket agencies such as travel agencies and air ticket agencies that enjoy the differential taxation policy, obtained by a taxpayer purchasing domestic passenger transport services, be used as a deduction voucher?

Answer:Electronic general invoices for agency passenger transport expenses issued by ticket agencies such as travel agencies and air ticket agencies at the 6% tax rate that a taxpayer obtains are purchases of "modern services - business auxiliary services" and do not belong to purchases of domestic passenger transport services, and cannot apply the special provisions of Article 6 of the Announcement of the Ministry of Finance, State Taxation Administration, and General Administration of Customs on Policies Concerning Deepening VAT Reform (Ministry of Finance, State Taxation Administration, and General Administration of Customs Announcement No. 39 of 2019) regarding calculation and deduction for other vouchers. According to current provisions on input VAT deduction, the above electronic general invoices obtained by taxpayers cannot be used as deduction vouchers.

[Question 17] Can only passenger tickets indicating passenger identity information be used as input VAT deduction vouchers?

Answer:Yes. According to the Announcement of the Ministry of Finance, State Taxation Administration, and General Administration of Customs on Policies Related to Deepening VAT Reform (Ministry of Finance, State Taxation Administration, and General Administration of Customs Announcement No. 39 of 2019), air transport electronic ticket itineraries bearing passenger identity information, railway tickets, and other tickets such as road and waterway tickets are currently temporarily allowed as input VAT deduction vouchers.

[Question 18] What types of vouchers can a general VAT taxpayer use to deduct input VAT when purchasing domestic passenger transport services?

Answer:Where a general VAT taxpayer purchases domestic passenger transport services, the vouchers that may be used for input VAT deduction include: VAT special invoices, VAT electronic ordinary invoices, air transport electronic passenger itinerary receipts stating passenger identity information, railway tickets, and other tickets such as road and water transport tickets.

[Question 19] An employee of our company lost a railway ticket. In this case, what voucher should be used to deduct input VAT?

Answer:According to the Announcement of the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs on Policies Concerning Deepening the VAT Reform (Ministry of Finance, State Taxation Administration, General Administration of Customs Announcement No. 39 of 2019), taxpayers shall use railway tickets, highway, waterway, and other tickets stating the passenger's identity information as the basis for input VAT deduction. If a ticket is lost, you need to obtain a replacement ticket from the issuing party as the basis for calculating and deducting VAT input.

[Question 20] How should a taxpayer file the deductible input VAT when purchasing domestic passenger transport services and obtaining a special VAT invoice?

Answer:Where a taxpayer purchases domestic passenger transport services and obtains a value-added tax special invoice, the deductible input tax calculated in accordance with regulations shall be filled in the corresponding column of "(1) Certified Value-Added Tax Special Invoices" in the Value-Added Tax Return Attached Schedule (II) at the time of filing.

[Question 21] How should a taxpayer file the deductible input VAT when purchasing domestic passenger transport services and obtaining a VAT electronic ordinary invoice or air, railway and other tickets indicating passenger identity information?

Answer:Where a taxpayer purchases domestic passenger transport services and obtains a value-added tax electronic ordinary invoice or documents such as aviation and railway tickets indicating passenger identity information, the deductible input tax calculated in accordance with regulations shall be filled in column 8b "Other" of the Value-Added Tax Return Attached Schedule (II) at the time of filing.

[Question 22] A taxpayer purchased domestic passenger transport services in April 2019. Obtained 1 air transport electronic itinerary receipt indicating passenger identity information, with a stated fare of 2,700 yuan, civil aviation development fund of 50 yuan, and fuel surcharge of 120 yuan. How should this taxpayer fill out the VAT tax return?

Answer:According to policy provisions, where a taxpayer purchases domestic passenger transport services and has not obtained a special VAT invoice, the input tax shall be calculated separately according to the type of voucher obtained. Where an air transport electronic ticket itinerary with passenger identity information is obtained, the input tax shall be calculated according to the following formula: air passenger transport input tax = (fare + fuel surcharge) ÷ (1+9%) × 9%. Note that the civil aviation development fund is not used as the base for calculating input tax. Therefore, when the taxpayer files the tax return for the tax period to which April 2019 belongs, it shall enter the air passenger transport input tax of 232.84 yuan calculated according to the above formula in the "Other" "Tax Amount" column of Column 8b of the VAT Tax Return Attached Materials (II), enter 1 copy in the "Other" "Number of Copies" column of Column 8b, and enter 2,587.16 yuan in the "Amount" column. At the same time, the above content shall also be entered in Row 10 "(4) Passenger Transport Services Used for Deduction in the Current Period" of this form.

Source: State Taxation Administration

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