[Bookmark for Study] Recent Hot Tax Consultation Q&A

Q1: Our company is currently a small-scale taxpayer filing quarterly. As our business scale expands, we completed general taxpayer registration in September, effective September 1. How should our company handle filing for the third quarter?

A1: Your company needs to handle two filing matters during the October filing period: first, handle the general taxpayer filing for the tax period of September; second, handle the small-scale taxpayer filing for the tax period of July to August. It should be noted that for small-scale taxpayers filing quarterly, if a small-scale taxpayer registers as a general taxpayer in the middle of a quarter, the corresponding small-scale quarterly filing (that is, your company's filing for the July to August period) shall uniformly be judged against the quarterly sales standard of 300,000 yuan to determine whether it can enjoy the VAT exemption policy for small-scale taxpayers. That is, if your company's sales from July to August do not exceed 300,000 yuan, it can still enjoy the VAT exemption preference for small-scale taxpayers.

Q2: The effect of tax exemption policies on small-scale taxpayers may differ depending on the tax period. So, can small-scale taxpayers choose to pay taxes monthly or quarterly on their own?

A2: Small-scale taxpayers that pay tax on a fixed schedule may choose monthly or quarterly filing according to their actual business conditions. To ensure that the taxpayer's tax payment period remains relatively stable within the year, once a taxpayer makes a choice, it cannot be changed within one accounting year. The one accounting year here refers to January to December in accounting terms, not one year counted from the date of choice. A taxpayer may submit a request to the competent tax authority to change its tax payment period at any time within each accounting year, but once the taxpayer chooses to change the tax payment period, it may not change it again before December 31 of that year.

Q3: Our company is a general taxpayer. An employee obtained an electronic ticket itinerary for business travel, and the itinerary separately notes a rebooking fee. Can the rebooking fee be used to calculate input VAT deduction as purchased passenger transport services?

A3: Yes. The change fee listed on the air transport electronic ticket itinerary receipt and the change fee listed on the railway ticket both fall within the scope of the total price and off-price charges obtained by the taxpayer for providing transport services, and the input VAT amount may be calculated and deducted in accordance with the relevant provisions of Article 6 of the Announcement of the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs on Policies for Deepening the Reform of VAT (Announcement No. 39 of 2019 of the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs, hereinafter referred to as Announcement No. 39).

Q4: After a general taxpayer issues or obtains an electronic invoice (railway electronic ticket), how should the VAT return be filled out?

A4: Recently, the State Taxation Administration, the Ministry of Finance, and China Railway jointly issued an announcement clarifying that starting from November 1, 2024, fully digitalized electronic invoices—electronic invoices (railway electronic tickets)—will be promoted and used in China's railway passenger transport sector. The amount and tax amount of the electronic invoice (railway electronic ticket) issued by a general taxpayer shall be filled in columns 3 to 4, 'Other Invoices Issued', of the VAT and Surcharge Tax Return Supplementary Schedule (I) (Details of Current Period Sales). The input VAT amount of the electronic invoice (railway electronic ticket) declared for deduction by a general taxpayer shall be filled in the relevant columns of 'VAT Special Invoices Verified as Consistent' in the VAT and Surcharge Tax Return Supplementary Schedule (II) (Details of Current Period Input VAT) at the time of tax filing. If a general taxpayer has already used the electronic invoice (railway electronic ticket) for VAT declaration and deduction, after the invoicing party initiates the red-letter reversal process, the VAT amount listed in the corresponding Red-Letter Invoice Information Confirmation Form shall be filled in column 20, 'Input VAT Amount Specified in the Red-Letter Special Invoice Information Form', of the VAT and Surcharge Tax Return Supplementary Schedule (II) (Details of Current Period Input VAT).

Q5: After the promotion and use of electronic invoices (railway electronic tickets), can railway tickets (paper reimbursement vouchers) still be used for reimbursement and bookkeeping?

A5: Passengers who need reimbursement and booking shall obtain an electronic invoice (railway electronic ticket). If the purchaser is a VAT general taxpayer, when purchasing domestic railway passenger transport services, the electronic invoice (railway electronic ticket) shall be used as the VAT deduction voucher, and the input VAT amount shall be determined in accordance with current provisions. The purchaser may log in to the electronic invoice service platform to query the VAT amount corresponding to the electronic invoice (railway electronic ticket) obtained from purchasing domestic railway passenger transport services, and determine the input VAT amount accordingly. To maintain a smooth transition, for railway tickets issued through the railway ticket sales and reservation system with travel dates before September 30, 2025 (paper reimbursement vouchers), passengers may still use such railway tickets (paper reimbursement vouchers) for reimbursement and booking, and purchasers may still determine the input VAT amount in accordance with Article 6, Paragraph 1, Item 3 of Announcement No. 39.

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