The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") jointly released on January 9, 2023 the Announcement of the Policies for Exemption and Reduction of Valued-added Tax ('VAT") on Small-scale VAT Taxpayers, which clarified the additional VAT deduction policy for 2023.
From January 1, 2023 to December 31, 2023, taxpayers in producer services are eligible for a 5 percent additional deduction of creditable input VAT in the current period from the tax amount payable, and taxpayers in life services are eligible for a 10 percent additional deduction of creditable input VAT in the current period from the tax amount payable, according to the Announcement, which also clarified that the measuring standards on taxpayers in producer services and life services are consistent with the previous rules, and other matters related to the additional VAT deduction policy would be subject to the No. 39 (2019) Announcement and the No.87 (2019) Announcement.
The STA released on the same day the Announcement of the Matters concerning the Tax Collection and Administration under the Policies for Exemption and Reduction of VAT on Small-scale VAT Taxpayers, as well as the new templates of the Statement for Applying a 5 Percent Additional VAT Deduction and the Statement for Applying a 10 Percent Additional VAT Deduction.