Illustration: How to issue a red-letter fully digitalized e-invoice for used car business

To implement the requirements of the "Opinions on Further Deepening the Reform of Tax Collection and Administration" issued by the General Office of the CPC Central Committee and the General Office of the State Council and to further advance the reform of invoice electronification, the State Taxation Administration issued the "Announcement of the State Taxation Administration on Promoting the Application of Fully Digitalized E-Invoices" (State Taxation Administration Announcement No. 11 of 2024), clarifying that, on the basis of the positive results achieved in the earlier pilots, fully digitalized e-invoices (hereinafter referred to as "fully digitalized e-invoices") will be officially promoted and applied nationwide starting from December 1, 2024. Today we help you understand:How to issue red-letter invoices for used car business? ↓

(1) When a used car trading market acts only as the invoicing party and issues, for the buyer and seller actually engaging in a used car transaction, a paper red-letter Unified Used Car Sales Invoice or a red-letter fully digitalized e-invoice bearing the words "Unified Used Car Sales Invoice":

1. If the seller is a natural person or a unit that has not completed tax information confirmation, and the buyer has not confirmed the booking, either party of the buyer and seller applies to the invoicing party for issuing a red-letter invoice, and after the invoicing party fills in and submits the "Confirmation Form", the invoicing party issues the red-letter invoice, without confirmation.

Example: Natural person N sells a used car to natural person O. Used car trading market P issues a fully digitalized e-invoice bearing the words "used car sales unified invoice" on the electronic invoice service platform. When a red-letter invoice needs to be issued, N or O applies to P for issuance of a red-letter invoice. P fills out and submits the Confirmation Form and then issues the red-letter invoice, with no confirmation required.

2. If the seller is a natural person or a unit that has not completed tax information confirmation, and the buyer has already confirmed the accounting entry, the buyer or the invoicing party shall fill out and submit the "Confirmation Form". After confirmation by the other party (the buyer or the invoicing party), the invoicing party shall issue a red-letter invoice.

Example: Natural person N sells a used car to enterprise Q. Through used car trading market P, a fully digitalized e-invoice bearing the words "used car sales unified invoice" is issued on the electronic invoice service platform. Q has completed accounting confirmation. When a red-letter invoice needs to be issued, Q or P fills out and submits the Confirmation Form, and after confirmation by P or Q, P issues the red-letter invoice.

3. If the seller is a entity or individual industrial and commercial household that has completed tax information confirmation, and the buyer has not completed booking confirmation, the seller fills out and submits the Confirmation Form, after which the invoicing party issues a red-letter invoice.

Example: Enterprise Q sells used cars to enterprise R. Through used car trading market P, a fully digitalized e-invoice bearing the words "Used Car Sales Unified Invoice" is issued on the electronic invoice service platform. If R has not confirmed it for accounting, when a red-letter invoice needs to be issued, Q fills out and submits the Confirmation Form, and then P issues the red-letter invoice.

4. If the seller is a entity or individual industrial and commercial household that has completed tax information confirmation, and the buyer has confirmed the accounting entry, both the seller and buyer may fill out and submit the Confirmation Form; after confirmation by the other party, the issuer issues the red-letter invoice.

Example: Enterprise Q sells used cars to enterprise R. Through used car trading market P, a fully digitalized e-invoice bearing the words "Used Car Sales Unified Invoice" is issued on the electronic invoice service platform. If R has already confirmed it for accounting, when a red-letter invoice needs to be issued, Q or R fills out and submits the Confirmation Form, and after confirmation by R or Q, P issues the red-letter invoice.

(II) When a used car trading market sells used cars under its own name, acting simultaneously as the invoicing party and the seller, and issues to the buyer a paper red-letter unified used car sales invoice or a red-letter fully digitalized e-invoice bearing the words "unified used car sales invoice":

1. If the buyer has not confirmed the booking, the used car trading market fills in and submits the "Confirmation Form" to issue a red-letter invoice, without confirmation.
Example: Where second-hand car market P sells a second-hand car to natural person N, and P issues a fully digitalized e-invoice bearing the words "Unified Invoice for Second-Hand Car Sales" on the electronic invoice service platform, when a red-letter invoice needs to be issued, P fills out and submits the Confirmation Form, and then P issues the red-letter invoice.

2. If the buyer has already confirmed the accounting entry, both parties may fill out and submit the "Confirmation Form". After confirmation by the other party, the used car trading market shall issue a red-letter invoice.

Example: Where second-hand car market P sells a second-hand car to enterprise Q, and P issues a fully digitalized e-invoice bearing the words "Unified Invoice for Second-Hand Car Sales" on the electronic invoice service platform, if Q has already confirmed the accounting entry, then when a red-letter invoice needs to be issued, P or Q fills out and submits the Confirmation Form, and after confirmation by Q or P, P issues the red-letter invoice.

(3) When a used car trading market purchases a used car and acts as both the invoicing party and the purchaser, issuing a paper red-letter used car sales unified invoice on behalf of the seller, or a red-letter fully digitalized e-invoice bearing the words "used car sales unified invoice":

1. If the seller is a natural person or a unit that has not completed tax information confirmation, the used car trading market fills in and submits the "Confirmation Form" before issuing a red-letter invoice.

Example: Natural person N sells a used car to used car trading market P. P issues a fully digitalized e-invoice bearing the words "used car sales unified invoice" on the electronic invoice service platform. When a red-letter invoice needs to be issued, P fills out and submits the Confirmation Form, and then P issues the red-letter invoice.

2. If the seller is a unit or individual industrial and commercial household that has completed tax information confirmation, and the used car trading market has not confirmed the accounting entry, the seller shall fill out and submit the "Confirmation Form", and the used car trading market shall issue a red-letter invoice.

Example: Enterprise Q sells used cars to used car trading market P. P issues a fully digitalized e-invoice bearing the words "Used Car Sales Unified Invoice" on the electronic invoice service platform. If P has not confirmed it for accounting, when a red-letter invoice needs to be issued, Q fills out and submits the Confirmation Form, and then P issues the red-letter invoice.

3. If the seller is a entity or individual industrial and commercial household that has completed tax information confirmation, and the used car trading market has completed booking confirmation, both parties may fill out and submit the Confirmation Form; after confirmation by the other party, the used car trading market issues a red-letter invoice.
Example: Enterprise Q sells used cars to used car trading market P. P issues a fully digitalized e-invoice bearing the words "Used Car Sales Unified Invoice" on the electronic invoice service platform. If P has already confirmed the purpose or confirmed it for accounting, when a red-letter invoice needs to be issued, Q or P fills out and submits the Confirmation Form, and after confirmation by P or Q, P issues the red-letter invoice.

Source: State Taxation Administration

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