There are detailed rules controlling the recording and processing of Chinese activities. These include guidelines on:
VAT is due on any taxable supply at the earlier of:
Chinese accounting records, vouchers, invoices and tax payment supporting documentation must be held for at least 10 years.
There is no allowance of non-payment of VAT due by customers. Businesses are therefore generally reluctant to issue invoices (fapiaos) without simultaneous cash payments.
Where a foreign company provides services to a Chinese company, the non-resident supplier is not required to register for Chinese VAT. The recipient is required to list the sale and purchase in their VAT return, which cancel each other out. The Chinese customer is required to withhold any VAT due on their consideration.
VAT Groups, whereby a collection of companies may submit a single, consolidated VAT return, are permitted in China. This requires special permission, and is only possible if the related companies are located in the same province of China.
This guide covers the essential steps ecommerce sellers need to take now that the UK has left the EU Customs Union and VAT regime to keep their cross-border sales going, avoid extra tax costs and frustrated customers.
Read the report to learn about key industry trends, emerging issues, and challenges faced by cross-border sellers and shippers.
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