What is VAT?
Value Added Tax (or VAT) is an indirect tax. Occasionally you might also see it referred to as a type of general consumption tax. In a country which has a VAT, it is imposed on most supplies of goods and services that are bought and sold. VAT is one of the most common types of consumption tax found around the world.
VAT Registration:
Vat Registration Consultancy in Shenzhen , China
In general, countries that have a VAT system requires some businesses to be registered for VAT purposes. VAT registered businesses can be natural persons or legal entities, but countries have different thresholds or regulations specifying at which turnover levels registration becomes compulsory. Businesses that are VAT registered are obliged to include VAT on goods and services that they supply to others (with some exceptions, which vary by country) and account for the VAT to the taxing authority. VAT-registered businesses are entitled to a VAT deduction for the VAT they pay on the goods and services they acquire from other VAT-registered businesses. We are one of the best Vat registration consultancy in Shenzhen , China. For more you can connect with us!
Who is Required to Register for VAT in China?
In China, businesses are required to register for VAT if their taxable supplies and imports exceed a certain threshold. While the exact thresholds differ from country to country, in many cases businesses must register once they reach a specific turnover level. In China, the threshold typically depends on the type and size of the business.
Additionally, businesses may voluntarily register for VAT if their taxable supplies and imports fall below the mandatory threshold but exceed a lower voluntary registration limit. Voluntary registration is often encouraged for start-up businesses, allowing them to recover VAT on expenses even before generating any revenue. This is especially beneficial for businesses looking to invest in growth and establish a foothold in the market.
VAT Returns:
A VAT return is a form you file with the authority, usually as asked by the authority, to show how much VAT you are due to pay them. If you’re not registered for VAT, you won’t be able to file VAT returns. The VAT return shows the calculation of the amount of VAT due on sales minus the amount of VAT reclaimable on purchases and expenses. The result is the amount payable to the authority. If the amount reclaimable on purchases and expenses is more than the amount due on sales, the authority will give you the difference back in the form of refund.
Return filing in China:
Taxpayers must file VAT returns with the FTA on a regular basis (quarterly or for a shorter period, should the FTA decide so) within 28 days from the end of the tax period in accordance with the procedures specified in the VAT legislation. The Tax returns shall be filed online using eServices.