PathToChina.com

By Vincent Cheung from www.pathtochina.com

Suppose that your trading WFOE is now established in Shanghai. You might will need to apply for the “General VAT Payer Status” (一般纳税人) in order to issue VAT invoice. Whether you should apply for general Vat payer status depends on your gross profit rate. VAT invoice is only use at the wholesale chain, between manufacturers and the wholesalers, or between manufacturers. Retailers selling goods directly to the final consumers don’t issue  VAT special invoices. Instead, state ordinary invoices inclusive of taxes at 4% to 6% are used. The benefit of issuing VAT license is that you can deduct input VAT from purchases when it pays the out VAT for sales, and get a VAT refund.  In order to be qualified to be a general VAT payer. You can start applying for it if your company meet any of following two requirements. 

 1.      You registered capital is over than 5 Million and the number of staff you hire is over  50.

2.      Your company ‘s annual turnover is more than 1.8 Million. You application will be approved If you can provide the sales contract or letter of intent proving that you will reach that target in a year.Besides, you need to satisfy following requirements,

1.      Of course you need to apply to the tax bureau or have your consultant apply for you

2.      You should maintain a sound accounting system to enable tax officials to ascertain the output VAT and input VAT

3.      Tax invoices are properly kept in compliance with regulations.

If you apply for it personally, you should submit following document:

 1) A application report clarifying your qualifications for being a general VAT tax payer and the obligation you will fulfill  2)business license issued by the tax bureau

3) relevant contracts, article of association, agreements

4) bank account certification

5) passport  or ID card of the legal representative and tax accountant

6) registered capital certification

7) other papework

Provided by www.PathToChina.com“

”Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business registration  service , please contact Vincent by vincent@pathtochina.com.

This entry was posted on Friday, October 19th, 2007 at 4:02 am and is filed under Tax & Accounting, Trading WFOE, Wholly Foreign-Owned Enterprises ("WFOE"). You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.