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	SUPPLEMENTARY NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON REVISING THE PROVISIONS ON THE USE OF SPECIAL VAT INVOICES

	(Promulgated as a Revision to the Notice of the State Administration of Taxation on Revising the Provisions on the Use of Special VAT Invoices No. 156 [2006] of the State Administration of Taxation)


SUBJECT : TAXATION; VALUE ADDED TAXES; VAT; TAX INVOICING
ISSUING DEPARTMENT : STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 02/16/2007
IMPLEMENT DATE : 02/16/2007
LENGTH : 675 words
TEXT :

I. Where, after a general VAT payer has issued a special VAT invoice (hereinafter referred to as special invoice), a red-letter special invoice need to be issued in the case of return of sold goods, sales allowances or wrong issuance of invoices, etc., it shall be handled differently according to the following measures:

i. In case both the deduction page of a special invoice and the invoice page can not be authenticated, the purchaser shall fill in an Application Form for Issuing Special Red-letter VAT Invoices (hereinafter referred to as the application form), and fill the specific reasons as well as the information about the corresponding special blue-letter invoice in the application form, and the competent taxation authority shall, after examination, issue an Advice Note on Issuing Special Red-letter VAT Invoices (hereinafter referred to as the advice note). The purchaser shall not transfer out the invoice as the input taxes.

ii. In case the goods purchased by the purchaser are not within the scope of items for deduction of VAT, and the special invoice obtained thereby has not been authenticated, the purchaser shall fill the specific reasons as well as the information about the corresponding special blue-letter invoice in the application form, and the competent taxation authority shall, after examination, issue an advice note. The purchaser shall not transfer out the invoice as the input taxes.

iii. In case the purchaser refuses to accept a special invoice due to any error in the invoice, the seller shall fill in an application form and submit it to the competent tax authority within the authentication term for special invoices, and fill the specific reasons as well as the information about the corresponding special blue-letter invoice in the application form. At the same time, the seller shall provide the written materials about the reasons for refusal, specific wrong items and correct contents as issued by the purchaser, and the competent taxation authority shall, after examination, issue an advice note. The seller shall issue a red-letter special invoice upon the strength of the advice note.

iv. In case a special invoice has not been delivered to the purchaser due to any mistake in the invoice or any other reason, the seller shall, in the next month after issuing bad special invoice, fill in an application form and submit it to the competent tax authority, and fill the specific reasons as well as the information about the corresponding blue-letter special invoice in the application form. At the same time, the seller shall provide the written materials about the reasons for refusal, specific wrong items and correct contents as issued by the purchaser, and the competent taxation authority shall, after examination, issue an advice note. The seller shall issue a red-letter special invoice upon the strength of the advice note.

v. In the case of return of sold goods or sales allowances, it shall be handled according to the provisions in the Notice, and the seller shall, after issuing a red-letter special invoice, submit the photocopy of corresponding accounting vouchers on this transaction to the competent taxation authority for archival filing.

II. In case the taxation authority needs to issue red-letter special invoices for issuing special invoices on behalf of small-scale taxpayers, it shall issue them by referring to the measures for the issuance of red-letter special invoices by general taxpayers, and the second page of the advice note shall be submitted to the taxation authority that issues invoices on its behalf.

III. In order to monitor and manage the advice notes, the State Administration of Taxation is developing an advice note issuance and management system. Before this system is popularized and applied, the advice notes shall be temporarily kept by general taxpayers for future reference, and the taxation authority shall not cancel them after verification. The red-letter special invoices shall not be submitted to the taxation authority for authentication for the time being.

IV. As for the special invoices issued in 2006, the red-letter special invoices can still be issued before April 30, 2007 according to the former legal provisions.