Beijing Municipal Bureau of Finance and Beijing Municipal Tax Service, State Taxation Administration

Jing Cai Shui [2018] No. 1762

Financial Bureau of each district, Taxation Bureau of Each District (Area):

Circular of the Ministry of Finance and the State Administration of Taxation on the Tax Policy Concerning the Refund of Uncredited Value-added Tax for Some Industries in 2018 (Cai Shui [2018] No. 70) is hereby forwarded to you for your compliance and implementation. The specific arrangement for tax refund in Beijing will be subject to further notice.

Appendix: Circular of the Ministry of Finance and the State Administration of Taxation on the Tax Policy Concerning the Refund of Uncredited Value-added Tax for Some Industries in 2018 (Cai Shui [2018] No. 70)

Beijing Municipal Bureau of Finance and Beijing Municipal Tax Service, State Taxation Administration

July 31, 2018

Appendix

Circular of the Ministry of Finance and the State Administration of Taxation on the Tax Policy Concerning the Refund of Uncredited Value-added Tax for Some Industries in 2018

Cai Shui [2018] No. 70

The Financial Department (Bureau of Finance) of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning, the Municipal Tax Service, SAT of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning, as well as the Bureau of Finance of Xinjiang Production and Construction Corps:

In order to facilitate the high-quality economic growth, it is decided to refund the period-end uncredited value-added tax (VAT) for selected industries in 2018. Related matters are hereby notified as follows:

I. Industries and enterprises covered by refund polices of period-end uncredited VAT

Industries covered by refund policies of period-end uncredited VAT include equipment manufacturing and other advanced manufacturing industries, as well as modern service industries and power grid enterprises such as research and development. The specific scope is as follows:

(I) Advanced manufacturing industries such as equipment manufacturing and modern service industries such as research and development.

According to the Industrial Classification for National Economic Activities, equipment manufacturing and other advanced manufacturing industries, as well as modern service industries such research and development, including manufacture of special purpose machinery, research and experimental development and other 16 categories. For details, please refer to the attached Catalogue of Industries for the Refund of Period-end Uncredited Value-added Tax in 2018. The industry in which a taxpayer operates shall be the national economic industry in the taxation register, and the taxpayers within the following scope shall be given preference:

1. The ten priority fields as set forth in the Made in China 2025: new-generation information technology, high-end numerically-controlled machine tools and robots, aerospace equipment, offshore engineering equipment and high-tech ships, advanced rail transit equipment, energy-saving and new energy vehicles, power equipment, agricultural machinery and equipment, new materials, biomedicine, and high-performance medical devices.

2. High-tech enterprises, technology-advanced service enterprises, and technology-based small and medium-sized enterprises.

(II) Power grid enterprises

All power grid enterprises obtained electrical business permit (for power transmission and power supply).

II. Conditions of taxpayer for the refund of period-end uncredited VAT

For the refund of period-end uncredited VAT, the taxpaying credit grades of taxpayer should be Grade A or Grade B.

III. Calculations of the refund of period-end uncredited VAT

In the case that a taxpayer applies to tax authorities for the refund of period-end uncredited, the current period-end uncredited tax amount should be calculated based on last period-end uncredited tax amount and percentage of the refund, and take period-end uncredited tax amount at the end of 2017 of taxpayer as the upper limit. The details are as follows:

(I) Refundable period-end uncredited = last period-end uncredited tax amount × percentage of the refund

The proportion of refund should be calculated as follows:

1. For taxpayers going through tax registration on and before December 31, 2014, the percentage of the refund should be the proportion of VAT, which was indicated by the deducted Special VAT Invoices, special payment certificates of customs import VAT invoices, and tax payment and remittance vouchers in 2015, 2016 and 2017, to all the input taxes which have been deducted in the same period.

2. For taxpayers going through tax registration on and after January 1, 2015, the percentage of the refund should be the proportion of VAT, which was indicated by the deducted Special VAT Invoices, special payment certificates of customs import VAT invoices, and tax payment and remittance vouchers in the actual operating period, to all the input taxes which have been deducted in the same period.

(II) In the case that the refundable period-end uncredited VAT is no more than that at the end of 2017, the refund of period-end uncredited VAT in the current period is the fundable period-end uncredited VAT. In the case that the refundable period-end uncredited VAT is more than that at the end of 2017, the refund of period-end uncredited VAT in the current period is the period-end uncredited VAT at the end of 2017.

VI. Work Requirements

(I) On the basis of the refund size of period-end uncredited VAT in 2018 determined by the Ministry of Finance and the State Administration of Taxation for all provinces (including autonomous regions, municipalities directly under the Central Government, and cities under separate state planning, the same below) in China on equipment manufacturing and other advanced manufacturing industries, as well as modern service industries and power grid enterprises such as research and development, following national macro policy guidance, and considering enterprises at various scales and in different types, the financial departments and tax authorities at provincial level should determine the taxpayers eligible to the refund of period-end uncredited VAT, and by August 31, 2018, report the name list of taxpayers and proposed refund amount to the Minister of Finance and the State Administration of Taxation for filing.

The refund size of period-end uncredited VAT in 2018 for all provinces in China on equipment manufacturing and other advanced manufacturing industries, as well as modern service industries and power grid enterprises such as research and development should be notified by the Ministry of Finance and the State Administration of Taxation separately. The period-end uncredited VAT of power grid enterprises in every province of China should calculate the refund of period-end uncredited VAT in the current period in accordance with this Circular, and refund VAT according to the actual calculation results.

(II) The financial departments and tax authorities at provincial level must attach great importance to these efforts to carefully plan and facilitate the projects as a whole. Supervision and analysis on the implementation, as well as publicity and explanation should be strengthened and well planned to ensure the smooth and orderly operation of the refund of period-end uncredited VAT, which should be completed by September 30, 2018.

(III) Before October 31, 2018, the financial departments and tax authorities at provincial level should report the executive reports on the refund of period-end uncredited VAT, including completion progress, working methods, results and effects and recommendations. In case of important issues arising from the implementation of policies, please report to the Ministry of Finance and the State Administration of Taxation in a timely manner.

Appendix: Catalogue of Industries for the Refund of Period-end Uncredited Value-added Tax in 2018

Ministry of Finance, State Administration of Taxation

June 27, 2018

Appendix: Catalogue of Industries for the Refund of Period-end Uncredited Value-added Tax in 2018