The Ministry of Finance and the State Taxation Administration released on March 24, 2022 the No.15 Announcement in 2022, clarifying the issues related to exemption of VAT for small-scale VAT taxpayers.
It is clarified that, starting from April 1, 2022 to December 31, 2022, small-scale VAT taxpayers would be entitled to VAT exemption for the taxable sales income applicable to the tax rate of 3%, and suspension of prepayment of VAT for VAT prepaying items at a rate of 3%. The document also extends the preferential tax policies as stated in Article 1 of the Announcement on Continuing the Implementation of the Partial Tax Policies as a Response against the Covid-19 (Announcement No.7 of the MOF and STA) to March 31, 2022. Specifically, the taxable sales income of small-scale VAT taxpayers earned before March 31, 2022 would be taxed at a reduced rate of 1% instead of 3%, and the prepaying VAT items applicable to a 3% rate would be taxed at a reduced rate of 1%.
