September 27 2021

Further Notice on Urban Maintenance and Construction Tax

Announcement by State Taxation Administration (STA)

The State Taxation Administration released on August 31, 2021 the Announcement on Matters Related to the Collection and Management of Urban Maintenance and Construction Tax, to be implemented from September 1, 2021. It is a supplementary announcement regarding the matters in our earlier email below. It further announces that:

  1. The taxpayer shall deduct the returned tax credits from the tax calculation basis for Urban Maintenance and Construction Tax in the next period from the date of receipt of the returned tax credit.
  2. The amount of returned tax credits is only allowed to be deducted in the urban construction tax calculation basis determined in accordance with the general VAT calculation method. The balance not fully deducted in the current period shall be continued to be deducted in the subsequent period according to relevant provisions.
  3. Small-scale VAT taxpayers who correct and mend the Urban Maintenance and Construction Tax which tax basis is determined using general tax method before, are allowed to deduct the balance has not been deducted.
  4. For the urban construction tax payable for “Exempted & offset” VAT, taxpayers shall declare and pay it to the competent tax authorities in the next period approved by tax authorities for “VAT of exempted & offset ”.
  5. The term of tax obligation for urban maintenance and construction tax is the same as that for VAT and consumption tax. If a taxpayer has paid more VAT and consumption tax than it's required to and it has received tax rebate, the overpaid urban maintenance and construction tax shall be rebated as well. Unless otherwise stipulated, the urban construction tax attached to the two taxes shall not be refunded if the two taxes are first under the methods of "return after collection", "refund after collection" and "refund upon collection".

Chinese reference could be found in STA official website: