China improves its “special” VAT invoice system to strengthen the process of e-invoicing

 

As per almost every country during the last years, China also has been trying to digitize the process of invoicing in order to reduce costs and improve overall control over transactions. China has adopted e-invoicing very fast and companies can integrate their ERP systems with those of the tax authorities in order to automatically issue e-invoices to their clients. This is the case for general VAT invoices, which can be used to claim a corporate income tax (CIT) or individual income tax (IIT) deduction, but not a VAT input credit.

 

In regard to “special” VAT invoices China started a pilot program that was trialed in  Ningbo, Hangzhou, and Shijiazhuang,  and since the 21st of January it was expanded to 11 more regions. Till now companies either had special machines for printing these invoices and physically sending them to their customers or for smaller businesses these invoices were picked up from the office of the local tax authority which made the process very time-consuming and costly.

 

The only issue for businesses now is whether they want to develop a custom e-invoicing platform for themselves or use a third party solution from an e-invoicing platform provider.

 

Source: internationaltaxreview.com

 

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