Page 60 - Doing Business in China

ACCOUNTING

AUTHORISED REPRESENTATIVE TAX MANAGEMENT PROCEDURE

China’s State Taxation Administration has implemented a tax management procedure that determines the
scope of authorised representative information to be collected based on factors such as enterprise type and
tax-related risks� It also allows the recognition and one-time collection of authorised representative information
for multiple uses by the State Taxation Administration and local tax bureaus� The tax management procedure
includes simplifying the submission of relevant supporting documents, optimising tax management processes,
strengthening credit management, and guarding against various tax-related risks such as the receipt and issue of
invoices by proxy�

Those handling tax affairs including legal representatives, persons in charge of finance, tax staff, tax agents, and
other personnel authorised by legal representatives are subjected to the procedure�

The information on tax affairs handlers shall include the following:

▪ Names

▪ Identity certification
▪ Mobile phone numbers
▪ Photo information

▪ Other information as required

Identity certification refers to the original valid resident identity cards, temporary resident identity cards, identity
certification of Chinese People’s Liberation Army soldiers, identity certification of Chinese People’s Armed
Police, mainland travel permits for Hong Kong and Macao residents, mainland travel permits for Taiwan residents,
passports of foreign citizens, and other identity certifications�

PRC ADMINISTRATIVE MEASURES FOR INVOICES

The present Administrative Measures of the People’s Republic of China for Invoices (“Measures”) were adopted by
the State Council on 12 December 1993 and revised on 20 December 2010� The Implementation Rules for Invoice
Management Measures of the People’s Republic of China were promulgated by the State Taxation Administration
(STA) on 28 December 1993 and revised on 27 December 2014� All entities and individuals that print, purchase,
issue, obtain, keep, and cancel invoices within the territory of the People’s Republic of China must observe these
Measures�

Since its implementation on 1 May 2016, VAT has replaced BT (business tax) across all sectors� The administrative
procedures for purchasing and upgrading VAT invoices are explained next�

TYPES OF VAT INVOICES
There are two types of VAT invoices in China—the normal VAT invoice and special VAT invoice� VAT invoices are
suitable for general and small-scale VAT taxpayers� Only a company with a general VAT taxpayer certificate may
obtain special VAT invoices and use them for VAT deduction purposes�

The company can apply for either paper VAT invoice or VAT e-invoice to meet the requirements from clients� The STA
is pushing forward the use of fully digitalised e-invoices which is expected to be implemented nationwide in 2023�

In this publication, we will mainly cover the administrative procedures for the paper special VAT invoice�

Doing Business in China 2023 | 59