How Should Enterprises Respond Under the Reverse Invoicing Policy? Kailing Technology's One-Stop Zero-Tax-Risk Solution

In April 2024, the State Taxation Administration issued the Announcement on Matters Concerning "Reverse Invoicing" by Resource Recycling Enterprises to Individual Sellers of Scrap Products, marking that tax management in the renewable resource recycling industry has entered a brand-new stage.

Driven by policy, more and more enterprises are breaking through traditional recycling boundaries and extending to high-end links in the industrial chain such as remanufacturing and high-value utilization, effectively driving employment growth and improving circular economy capacity, and providing strong institutional guarantees for building a green, low-carbon circular economy system and achieving high-quality development.

While promoting the standardized development of the industry, this policy also places higher demands on enterprises' internal management, system support, and compliance capabilities.

I. Policy Background and Real Corporate Challenges

The "reverse invoicing" policy clearly states that when resource recycling enterprises purchase scrapped products from individuals, they must handle VAT and individual income tax filing on their behalf and issue invoices. Individuals with monthly sales not exceeding 100,000 yuan are exempt from VAT; if exceeded, the recycling enterprise must handle tax filing on their behalf. Individuals whose sales of scrapped products exceed 5 million yuan for 12 consecutive months must register as business entities.

Enterprises face multiple challenges:

- Complex business process: full-chain management from identity verification, transaction collection, and tax calculation to invoice issuance is required.

- High compliance risk: complete business authenticity materials must be retained, such as contracts, weighbridge tickets, payment records, etc., otherwise tax audit risks may arise.

- System support shortcomings: most enterprises lack digital invoicing capabilities connected with weighbridges, SAP, and fund systems, and rely on manual work, which is prone to errors.

II. Kailing Technology one-stop solution: four core modules

1. Identity verification and electronic contracting

Enable real-name registration for individuals via the mini program, submission of ID card and bank card information, online signing of tax agency agreements, and fully electronic evidence preservation, in compliance with the requirements of the Tax Collection and Administration Law.

2. Intelligent tax item matching and quota control

The system automatically matches product SKUs with tax codes to prevent incorrect invoicing; real-time verification of natural person cumulative sales (whether exceeding 5 million in 12 months), blocking over-limit transactions to avoid compliance risks.

3. Full-chain business evidence preservation and management

Integrates the weighbridge system to automatically obtain data such as gross weight, tare weight, and vehicle information, generate orders, and push them to the SAP system. At the same time, it automatically archives procurement contracts, weighbridge tickets, payment records, and other materials, forming a complete electronic ledger.

4. Reverse invoicing and agency filing

Supports integrationCommonly seen on the marketThe tax control system enables automatic invoicing and red-letter reversal processing, and automatically generates the "Tax Payment Agency Report Form" within the filing period of the following month, assisting enterprises in completing VAT and individual income tax filing and payment.

III. System Integration and Delivery Assurance

Kailing Technology provides two modes: private deployment and Leqi Direct Connection interfaces, supporting seamless integration with SAP, weighbridges, and treasury systems. Project deliveryOptionalFull source code, supporting custom development, and providingPhasedOn-site implementation, training, and operations and maintenance services.

Typical delivery cases:

A certain large metal resource recycling enterprise, by introducing Kailing Technology's reverse invoicing system, achieved:

- Online authentication and management of individual identity;

- Automatic collection of weighbridge data and order generation;

- Electronic archiving of full-chain business materials;

- Automatic invoicing and filing, reducing labor costs by 70%;

- No cases of abnormal tax audits throughout the year.

The "reverse invoicing" policy is both a heavy regulatory measure and an important opportunity for the industry to move toward standardization and digitalization. Only by achieving integrated management of business, finance, and tax through technological means can enterprises reduce costs and increase efficiency while maintaining compliance, and stand out in competition.

Contact Kailing TechnologyInstantly obtain a customized compliance solution for reverse invoicing for renewable resource enterprises，Accompanying enterprises through policy cycles to achieve zero-risk tax operations.：https://www.kailingteck.com/h-col-127.html 。

As a comprehensive business-finance-tax digitalization solution service provider, Kailing Technology provides business-finance-tax management digital transformation products and operational services for various government agencies, institutions, and large, medium, and small enterprises. The product line includes:

Solutions for sales contract management system, procurement contract management system, fully digitalized Leqi interface project, automatic output VAT invoicing system, invoice issuance for individuals system, employee expense control and reimbursement system, input VAT invoice management system, supply chain collaborative reconciliation system, imaging OCR recognition system, automatic financial bookkeeping system, electronic accounting archives system and other businesses, comprehensively advancing the digitalization process across various fields.

If you have any business-finance-tax digital transformation needs, welcome to contact us. Beijing Kailing Technology will serve you wholeheartedly.