Policies on issuing VAT ordinary invoices for individuals, come and learn (with Kailing Technology's solution)

At a time when cooperation between enterprise operations and individual services is becoming increasingly frequent, invoice issuance for individuals of VAT general invoices has become an important way to meet enterprises' compliant invoice needs and safeguard individuals' tax obligations. Especially with the full implementation of the China Golden Tax Phase IV system, tax supervision has become stricter, and understanding the latest policies on invoice issuance for individuals of VAT general invoices and solving the pain points in the invoice issuance process has become a common need for both enterprises and individuals.

I. Policy Background: Dual Drivers of Regulation and Demand Under China Golden Tax Phase IV

In recent years, with the construction of "China Golden Tax Phase IV" as the core, the State Taxation Administration has promoted the upgrade of the tax system toward "smart supervision," and the policy environment for invoice issuance for individuals of VAT general invoices has also been optimized and standardized accordingly. The core driving factors are reflected in two aspects:

1. Regulatory upgrade: Standardize market order, reduce tax risks

China Golden Tax Phase IV, through three major means—big data analysis, information sharing verification, and electronic tax bureau informatization—achieves full-process supervision of invoice issuance for individuals:

- Connect data from multiple departments such as tax, industry and commerce, and banks, enabling real-time verification of individual identity information, business authenticity, and tax payment records;

- Focus on cracking down on non-compliant practices such as "false invoicing" and "booking expenses with white slips," requiring that corporate expenditures must obtain lawful ordinary VAT invoices as pre-tax deduction vouchers;

- Strengthen information traceability for invoice issuance for individuals scenarios characterized by "large numbers, scattered distribution and high mobility" (such as freight, housing leasing and sporadic services), to avoid risks such as inability to verify identity and improper information storage.

2. Growing demand: the rigid compliance needs of enterprises and individuals

As economic activities become more granular, scenarios of cooperation between enterprises and individuals (such as freight services by individual drivers, personal housing leasing, and sporadic labor provision) are increasing, giving rise to demand for invoice issuance:

- Enterprise side: needs to obtain compliant VAT ordinary invoices to deduct costs, reduce tax burden pressure, and avoid tax penalties due to "expenditures without invoices";

- Individual side: As the service provider, they need to issue invoices through formal channels, fulfill tax obligations, and meet the invoice requirements of partner enterprises.

II. Scope of Issuing VAT Ordinary Invoices for Individuals

According to current policy, the business scope for which individuals may apply for issuance of ordinary VAT invoices on their behalf includes four major categories, covering the vast majority of individual-enterprise cooperation scenarios:

- General invoice issuance for goods, services, etc.: such as individuals selling small commodities, providing sporadic services like design/consulting/cleaning;

- Leasing real estate: individuals leasing housing, shops, etc. (such business can also be issued special VAT invoices on behalf; general invoices apply to scenarios where the lessee does not need deduction);

- Goods transportation services: road goods transportation services provided by individual drivers (proof materials such as transportation orders and vehicle information are required).

> Warm reminder: Individuals can only apply for issuance of VAT special invoices for "real estate leasing and real estate sales" business. For other business, if invoicing is needed, VAT ordinary invoices are primarily used.

III. Current pain points of invoice issuance for individuals of VAT ordinary invoices

Although the policy has clarified the invoice issuance process and benefits, in actual operation, enterprises and individuals still face many pain points, resulting in low invoice issuance efficiency and high compliance risks:

1. Low willingness of individuals to issue invoices and insufficient cooperation

Most individuals are unfamiliar with the invoice issuance for individuals process and have concerns about "trouble and tax payment," making them unwilling to actively cooperate with enterprises in invoicing; some enterprises need to spend a great deal of time guiding individuals through the operations, resulting in high education costs and low efficiency.

2. Cumbersome issuance-for-individuals process and long cycle

Traditional invoice issuance for individuals requires individuals to complete "registering with the electronic tax bureau- Real-name face scan- Fill in information- Submit for review- Pay taxes and fees- Download invoice" and other multiple steps; if any step gets stuck (such as incorrect information entry or delayed review), the entire cycle may take up to 3- 5 days, making it difficult for enterprises to obtain invoices in a timely manner.

3. High difficulty in information management and high compliance risks

When enterprises face dispersed natural persons (such as hundreds of individual drivers or dozens of property lessors), they need to collect identity information, business proof, invoice details, and other materials, which easily leads to problems such as "difficult identity verification, lost materials, and inconsistent information," increasing tax audit risks.

4. High tax filing pressure, prone to omissions and errors

Individuals are unfamiliar with individual income tax filing rules (such as the distinction between business income and remuneration for services, and the annual settlement process). If enterprises need to withhold and remit taxes, they face the problems of "low accuracy of manual tax calculation and cumbersome filing in multiple locations," which easily leads to omissions and errors.

IV. Kailing Technology Solutions: full-process digitalization to solve invoice issuance challenges

In response to the policy requirements and practical pain points of invoice issuance for individuals of VAT ordinary invoices, Kailing Technology, relying on business-finance-tax digitalization + technology integration capabilities, has built a full-process solution for invoice issuance for individuals of VAT ordinary invoices, achieving the goals of policy compliance, simplified processes, and controllable risks.

1. Overall architecture: Connecting to the electronic tax bureau, linking enterprises and the tax end

One end of the Kailing Technology solution connects to the enterprise's existing business systems (such as enterprise ERP, driver-side APP, and housing lease management system), and the other end directly connects to the electronic tax bureaus of each province, forming an "enterprise-initiated-Individual cooperation-Tax Review-The closed loop of invoice delivery。

At the same time, the solution adopts 100% private deployment (for example, deployed on the enterprise intranet), safeguarding the security of individuals' identity information and business data and complying with China Golden Tax Phase IV data privacy requirements.

2. Core functions: solving four major pain points and improving invoice issuance for individuals efficiency

(1) Face-scan authentication: simplifies the real-name process, no need to redirect to a third party

To address the pain point that individuals "fear trouble," the solution adoptsIntelligent face scantechnology embeds the electronic tax bureau's face-scanning function into an enterprise's existing APP/mini-program:

- Individuals do not need to download the electronic tax bureau APP;

- A single face scan completes real-name verification, avoiding repeated operations.

(2) Information automation: reduce manual entry and lower error rates

The solution optimizes the information submission step through "data pre-filling + automatic verification":

- When an enterprise initiates an invoice issuance request, it can prefill the recipient information and basic business information;

- Natural persons only need to supplement personal information and upload necessary proof, and the system automatically verifies information consistency;

- Supports batch information import, reducing manual entry costs.

(3) Review and payment: fully visualized, shortening the cycle

- Faster review: connected to the electronic tax bureau review interface, enterprises and individuals can view review progress in real time, and overdue reviews trigger automatic reminders;

- Multiple payment options: supports three tax and fee payment methods, covering different scenarios:

1. Bank batch withholding: After the enterprise signs with the bank, the system automatically withholds taxes and fees, with no operation required by the individual;

2. UnionPay payment: Enterprise finance personnel configure a dedicated bank card, the system automatically fills in payment information, and payment can be completed with only a verification code;

3. Scan-to-pay: Generate WeChat/Alipay QR codes; individuals or enterprises scan to pay, with real-time crediting.

(4) Red-letter reversal and individual income tax management: full-process coverage, reducing risks

- Red-letter reversal tax refunds: if an invoice needs to be voided or red-letter reversed, the system can directly initiate a "red-letter information confirmation form" and connect to the electronic tax bureau to complete the red-letter reversal, with taxes and fees generally refunded via the original route within T+1 day;

- Individual income tax assistance: To address the difficulty individuals face in filing, the solution provides individual income tax filing guidance and supports connection to the Individual Income Tax Electronic Tax Bureau to assist individuals in completing quarterly settlement of business income.

3. Technical advantages: Adapt to policy requirements, ensuring stable operation

- Multi-province electronic tax bureau adaptation: completedVariousProvincial electronic tax bureau interface adaptation, supporting policy differences across regions;

- Batch processing capability: daily throughput of up to 520,000 transactions, meeting enterprises' large-scale invoice issuance for individuals needs;

- IP security strategy: adopt an IP proxy solution to prevent the server IP from being blocked by the tax system, technically compliant and cost-controllable.

With the deepening of China Golden Tax Phase IV supervision, the compliance and efficiency of invoice issuance for individuals have become core needs for both enterprises and individuals. Understanding policy highlights and resolving pain points in invoice issuance are key to all parties successfully completing invoice issuance.

Kailing Technology's invoice issuance for individuals solution, through full-process digitalization, multi-system integration, and risk-controllable design, both meets tax regulatory requirements and greatly reduces the cost of invoice issuance for individuals for enterprises and individuals.

If your enterprise faces challenges with invoice issuance for individuals, you can further consult Kailing Technology to obtain a customized solution：https://www.kailingteck.com/h-col-126.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.