Relevant provisions for Applying “Ordinary Tax-payer”

As mentioned above, an ordinary tax-payer qualification is needed to apply for approval from the relevant tax bureau.  At present, the Chinese government has tried to pilot certain business tax for VAT.

"Ordinary tax-payer of VAT Qualification Recognition Approach" of State Administration of Taxation Order No. 22:-

1.   Article 3:  VAT payers (hereinafter referred to as the tax-payer), the annual taxable sales amount in excess of the standard for small-scale tax-payers of Ministry of Finance, State Administration of Taxation. In addition to the provisions of Article 5 for this approach, it should apply to the relevant tax authorities for the ordinary tax-payer for such funding rid as identification.

The term “annual taxable sales amount” refers to: for less than 12 months of operations as a period, the cumulative sales to VAT Sales amount, including duty-free sales.

2.   Article 4: The annual taxable sales does not exceed the standard of small-scale tax-payers as set by the Ministry of Finance , State Administration of Taxation and the newly opened tax-payers may apply to the relevant tax authority for the ordinary tax-payer qualification. The conditions for the tax-payers to apply should meet the following conditions. The tax authorities shall identify the qualification of the ordinary tax-payer: 
    (1)   Have a fixed place of business; 
    (2)   In accordance with the national unified accounting system, has set up books, according to the legal, valid certificate accounts etc which can provide accurate tax information.

3.   Article 5:  The following tax-payers are not qualify for the ordinary tax-payer requirements:- 
    1. Sole business unit but except an individual
    2. Select to be a small scale tax-payer but a non-enterprise unit; 
    3. Select to be a small-scale tax-payer and is infrequent for taxable activities. 


Article 9:   Tax-payers should comply with the provisions of Article 4, in accordance with the following procedures, applying for qualification as an ordinary tax-payer. 

A)  A tax-payer should report to the tax authorities through an application form and provide the following information: 

  •     1  copy of the "Tax registration certificate"; 
  •     2  personnel identification and photocopy of financial officer and taxation personnel; 
  •     3  qualification certificate of the accounting personnel or the signed agreement with the agency and a copy of bookkeeping; 
  •     4  Premises proof of ownership or lease agreement, or such other use of the venue and the photocopy thereof; 
  •     5  The State Administration of Taxation and other relevant information. 

B)   Relevant tax authority will accept the tax-payer after receiving its application according to the requirements for on-site inspection and prepare inspection reports. 

  •      (1)   The inspection report by the tax-payers or its legal representative (responsible person or owner), who co-signed the tax inspection (signature) constitutes recognition.
  •      (2)   On-site inspection, it shall have two or more than two staff members at the time when the tax authorities go to the scene. 
  •      (3)   On-site inspection of the scope and methods by the tax authorities of the provinces which reports to the State Administration of Taxation for record. 

C)     Relevant tax authority will complete the application process within 20 days;

D)    The tax-payer, since that recognized as an ordinary tax-payer of the month following, calculating according to the regulations the tax payable, purchasing and using special VAT invoices.

The newly opened tax-payers means the one upon tax registration, within 30 days from the date of application for the ordinary tax-payer qualification tax-payers.

"VAT Ordinary Tax-payer Qualification Recognition Approach":  For the ordinary tax-payer who qualifies for such tax-payers, it has to go through the application, data review, field sight verification, review and approval and other procedures; site inspection scope and such kind of methodology of the tax authorities by the provinces and report to the State Administration of Taxation for record. Guangdong Provincial State Taxation Bureau issued the relevant documents requires :


  • I. Relevant tax authorities shall strengthen policy advocated for tax-payers and tax services, upon being satisfied, the approval process should speed up, new businesses, at the same time when tax registration fill out the "Application Form for VAT ordinary tax-payer", can be used for processing an ordinary tax-payer procedures.
  • II. Relevant tax authority must comply with "Recognition" set out in Article IV criteria, and the registered capital of RMB 800,000 (including those below RMB 800,000) below wholesale trade enterprises to conduct field inspection. For others, according to "Recognition" Article IV: criteria applies to identify ordinary tax-payer enterprises need to conduct on-site inspection by the prefectural-level city under the actual conditions. Field inspection shall be according to the "deemed measures" set out in Article IX and such kind of procedures and inspection includes whether there is a fixed production and business establishments; whether in accordance with the provisions of the national unified accounting system set up books, legal, valid certificate accounts etc, to provide accurate tax information material. Inspection report to the "Guangdong Province Tax Administrator Fieldwork Table (VAT Ordinary Tax-payer)" (see Table ) in the form of production.


Schedule: Guangdong Province, the Tax Administrator Fieldwork Table (VAT Ordinary Tax-payer)