Announcement of the General Administration of Taxation of the Ministry of Finance on clarifying the policy of value-added tax deduction and deduction for domestic service industries

The policy announcement on value-added tax deduction of domestic service industry is as follows:

1. From October 1, 2019 to December 31, 2021, taxpayers of domestic service industries are allowed to deduct 15% more of the input tax deductible in accordance with the current period to offset the tax payable (hereinafter referred to as the 15% additional deduction policy).。

The term "taxpayers of living service industry" as mentioned in this Announcement refers to taxpayers whose sales from the provision of living services account for more than 50% of the total sales。The specific scope of life services shall be implemented in accordance with the "Sales Services, Intangible Assets, real Estate Notes" (issued by Finance and Taxation (2016) No. 36)。

For taxpayers established before September 30, 2019, whose sales during the period from October 2018 to September 2019 (if the operating period is less than 12 months, according to the sales during the actual operating period) meet the above specified conditions, the additional deduction and reduction policy shall apply from October 1, 2019。

For taxpayers established after October 1, 2019, if the sales of 3 months from the date of establishment meet the above specified conditions, the additional deduction policy of 15% will be applied from the date of registration as a general taxpayer。

After the taxpayer determines the application of the 15% additional deduction policy, it will not be adjusted within the current year, and whether it is applicable in subsequent years shall be calculated according to the sales volume of the previous year。

3. Taxpayers of domestic service industries shall calculate the additional deduction amount for the current period according to 15% of the input tax that can be deducted for the current period。The input tax that cannot be deducted from the output tax according to the current regulations shall not be deducted from the amount of additional credit;Where the input tax has been deducted at 15% and the input tax is transferred out according to the regulations, the amount of the input tax shall be adjusted and increased accordingly during the period when the input tax is transferred out。The calculation formula is as follows:

Amount of additional deduction for the current period = Input tax deductible for the current period ×15%

Current deductible plus deductible = Balance of previous period plus deductible + current period plus deductible - current period plus deductible

Other matters related to the taxpayer's application of the additional deduction policy shall be implemented in accordance with the relevant provisions of the Announcement on Deepening the Relevant Policies of VAT Reform (Announcement No. 39 of 2019 by the General Administration of Customs of the General Administration of Taxation of the Ministry of Finance)。

Hereby announce。

General Administration of Taxation, Ministry of Finance

September 30, 2019