VAT payers in China are separated into two different categories – general taxpayers and the small-scale taxpayers – and the VAT rates vary for different statuses. General taxpayers are subject to a 13% VAT rate for designated goods and a 17% VAT rate for all other goods and all taxable services.

Although the VAT rate for small-scale taxpayers is much lower, obtaining the general taxpayer status is still essential and beneficial for companies with considerable annual business turnover, because the status has many advantages.

Benifits of the General Taxpayer

General taxpayer can reasonably control tax bearing rate and actual paid tax.If the company receives the input invoice, the input tax can be verified and deducted.

General taxpayer tax variety. As long as the project that there is inside business limits , can add tax categories to tax bureau, according to plan of different tax rate

General taxpayer financial system is relatively sound, larger, with the government or formal large companies, the general taxpayer is more advantageous, customers are more recognized sound qualification, larger companies.

There is no upper limit for the annual income of general taxpayers, while there is a upper limit for small-scale tax payer (500,000 for industrial enterprises, 800,000 for commercial enterprises, and 5 million for service industry). Once the income exceeds 12 consecutive months, it is mandatory to become general taxpayers.

Requirements for General Taxpayer Application

Manufacturing enterprises (enterprises engaged or mainly engaged in goods production or taxable service provision) with an estimated annual taxable turnover exceeding RMB500,000.

Other types of enterprises (enterprises where at least 50 percent of their income comes from the wholesale or retail of goods) with an estimated annual taxable turnover exceeding RMB800,000.

Being able to establish account books according to the unified accounting system of the State, conduct accounting in light of valid and effective vouchers, and provide accurate tax information.

Having fixed premises of production and operation

If you still don’t know how to choose the general taxpayer or the small-scale taxpayer? We will give you the professional advice, and our corporate fiscal services is on discount. Don’t miss it.

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