On May 19, 2017, the State Administration of Taxation issued the 16th Announcement of the State Administration of Taxation on the Issues Concerning the Opening of VAT Invoices in 2017, which aroused various interpretations. Some even claimed that it was "the strictest invoice order" and "the latest invoice issuance provisions". Is that true?

Ma Liangjun, a lawyer who has long been concerned about the risks of enterprises, believes that this announcement is a clear, reiterated or warning to the existing problems in the market.

Article 21 of the Invoice Management Measures stipulates that "Invoices that do not conform to the regulations shall not be used as financial reimbursement vouchers, and any unit or individual shall have the right to refuse to accept them." Article 22 clearly stipulates that "invoices shall be issued in accordance with the prescribed time limit, sequence and columns, all of which shall be faithfully issued at one time in succession, with a special invoice stamp affixed. No unit or individual may engage in any of the following acts of false invoicing:

(1) Invoice inconsistent with the actual business situation for others and for themselves; (2) Invoice inconsistent with the actual business situation for others; (3) Invoice inconsistent with the actual business situation for others; (3) Invoice inconsistent with the actual business situation for introducing others.

Article 28 of the Detailed Rules for the Implementation of Invoice Management Measures stipulates that when issuing invoices, units and individuals must fill in the invoices in the order of numbers, complete the items, true content, clear handwriting, print them all at once, and the contents are identical, and affix special invoice stamps to invoice couplets and deduction couplets.

It can be seen from the above that "Complete Filling in Items" is a long-standing provision, and the column "Purchaser Taxpayer Identification Number" itself is the inherent column of special VAT invoices and ordinary VAT invoices, which should be filled in. Therefore, the first item of the 16th Announcement is not a new provision, but a clarification and reiteration of the original provisions.

Article 20 of the Procedures for the Administration of Invoices of the People's Republic of China stipulates that: "All units and individuals engaged in production and business activities shall obtain invoices from the payee for the payment of goods, services and other business activities. When an invoice is obtained, no change in the name or amount of the product shall be required." It can be seen that when issuing invoices, the spirit of "issuing invoices in accordance with the stipulated columns and complete items with true and truthful contents" is also consistent with the stipulated spirit, which is a refinement of the original provisions.

In short, Announcement No. 16 is a clear reiteration of the relevant provisions and a warning of the problems in the current market. The statement of "the strictest invoice order" and "the latest invoice issuance regulations" is misleading.
Some companies require employees to go to supermarkets to buy office supplies to offset the company's "benefits," or to find invoices everywhere to offset wages to avoid taxes, and so on. For these acts, the post-16th Announcement has issued a serious warning, which should be highly valued. In short, Announcement No. 16 is a clear reiteration of the relevant provisions and a warning of the problems in the current market. The statement of "the strictest invoice order" and "the latest invoice issuance regulations" is misleading.

Some companies require employees to go to supermarkets to buy office supplies to offset the company's "benefits," or to find invoices everywhere to offset wages to avoid taxes, and so on. For these acts, the post-16th Announcement has issued a serious warning, which should be highly valued.

Lawyer Ma Liangjun believes that as a taxpayer, it should be clear that whether it is invoicing or accepting invoices issued by the seller, or special VAT invoices or ordinary invoices, invoices should be issued in accordance with the regulations and invoices issued in accordance with the regulations should be obtained, which should become basic common sense.
Lawyer Ma Liangjun believes that in today's rule of law, the majority of enterprises mainly want to avoid "risk" and can only operate according to law and pay taxes according to law. The best way to protect oneself is to abide by the law, take the law as a companion and take the lawyer as a companion.

Annex 1:
Announcement of the State Administration of Taxation on Issues Concerning the Issuance of VAT Invoices
(State Administration of Taxation Announcement No. 16, 2017)

In order to further strengthen the management of VAT invoices, ensure the smooth implementation of the pilot work of comprehensively pushing business tax to VAT, protect the legitimate rights and interests of taxpayers, and create a healthy and fair tax environment, the relevant issues concerning VAT invoices are announced as follows:

1. From July 1, 2017, when the purchaser is an enterprise, he shall provide the taxpayer identification number or unified social credit code to the seller when he solicits the ordinary VAT invoice; when the Seller issues the ordinary VAT invoice for him, he shall fill in the taxpayer identification number of the purchaser or the unified society in the column of "Taxpayer identification number of the purchaser". Credit code. Invoices that do not conform to the regulations shall not be used as tax vouchers.
The enterprises referred to in this announcement include companies, non-corporate legal persons, branches of enterprises, sole proprietorship enterprises, partnerships and other enterprises.

2. When issuing VAT invoices by the seller, the contents of the invoices shall be faithfully drawn up in accordance with the actual sales situation and shall not be filled out according to the requirements of the buyer that are inconsistent with the actual transactions. When issuing invoices, the sellers connect the sales platform system with the VAT invoice tax control system in the background and import relevant information to invoice, the contents of invoice data imported by the system should be consistent with the actual transactions, and if not, the sales platform system should be modified and improved in time.

I hereby announce.
State Administration of Taxation
19 May 2017

Annex 2:
On May 26, 2017, the General Office of the State Administration of Taxation issued an authoritative interpretation of the announcement.

1. What is the background of this announcement?

In order to further strengthen the management of VAT invoices, ensure the smooth implementation of the pilot work of comprehensively pushing business tax to VAT, protect the legitimate rights and interests of taxpayers, create a healthy and fair tax environment, clarify the relevant issues of VAT invoices, and issue this announcement.

2. What is the requirement of this announcement for the issuance of VAT invoices?

(1) As of July 1, 2017, when the purchaser is an enterprise, he shall provide the taxpayer identification number or unified social credit code to the seller when he solicits the ordinary VAT invoice; when the Seller issues the ordinary VAT invoice for him, he shall fill in the taxpayer identification number or unified society of the purchaser in the column of "Taxpayer identification number of the purchaser". Credit code. Invoices that do not conform to the regulations shall not be used as tax vouchers for tax-related business, such as taxation, tax refund, deduction, etc.

The enterprises referred to in this announcement include companies, non-corporate legal persons, branches of enterprises, sole proprietorship enterprises, partnerships and other enterprises.

(2) The Regulations of the People's Republic of China on Invoice Management stipulate that when issuing an invoice, the Seller shall faithfully issue an invoice in conformity with the actual business operation. When the purchaser obtains the invoice, he shall not require any change in the name and amount of the goods. But at present, it is found that some sellers allow the purchaser to choose the name of goods and services that need to invoice through their sales platform, and to issue invoices that are inconsistent with the actual business according to the requirements of the purchaser. This announcement makes it clear once again that when the Seller issues VAT invoices, the contents of the invoices should be faithfully drawn up in accordance with the actual sales situation, and that the contents that are inconsistent with the actual transactions should not be filled out according to the requirements of the buyer. When issuing invoices, the sellers connect the sales platform system with the VAT invoice tax control system in the background and import relevant information to invoice, the contents of invoice data imported by the system should be consistent with the actual transactions, and if not, the sales platform system should be modified and improved in time.

Author: Ma Liangjun, founding partner and lawyer of Shanghai Jilu Law Institute

Statement:
This article was originally created by the lawyer of Shanghai Jilu Law Firm and represents the author's own opinion. It should not be regarded as the formal legal opinions or suggestions issued by Jilu Law Firm or its lawyers. If you need to reproduce or quote anything in this article, please indicate the source.