Ningbo Focus (July 2012)
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BUSINESS ｜商业 26 ningbo focus July 2012 www.ningbofocus.com T Value Added Tax (VAT) is not as straight forward in P.R. China as in the ‘West’. To make matters worse, not all local finance managers working for FIEs are up to speed with respect to all of the elements of the VAT law which are relevant to you. The VAT competencies tied to foreign invested manufacturing companies (WFOE) tend to be good, while the same does not necessarily apply to foreign invested trading companies (FICE), with the result that finance managers with a manufacturing background may end up calculating the export VAT refund based on the regulations of a manufacturing company instead of a trading company. Such a comprehensive topic as VAT is ‘worthy a book’. Herein follows an executive summary of the VAT essentials: VAT Rate The applicable VAT rate is 17%. This rate applies to goods and not services (a trial project launched in Shanghai may result in VAT being introduced to services later on). Purchase VAT If presuming that the cost of the purchased goods is net RMB 100,000 before VAT, and presuming that the import duties tied to importing the same product amounts to 5% based on the applicable import code (HS code) of the product, the Purchase VAT will be calculated as follows: Note: The purchase VAT will remain ‘un- classified’ until the goods are being exported or sold domestically, whereupon the correct VAT refund classification will be made in your books. The purchase VAT is calculated in the same way for both manufacturing and trading companies. Sales VAT If presuming that the sales price of the sold VALUE ADDED TAX (VAT) For Foreign Invested Enterprises (FIEs) in Ningbo An executive summary of the applicable laws By Helge Hareland Helge Hareland goods is net RMB 180,000 before VAT, the Sales VAT will be calculated as follows: Note: The sales VAT is calculated in the same way for both manufacturing and trading com- panies. VAT Refund – Domestic Sales VAT is not refunded in cash, in connection with domestic sales, as the sales VAT is supposed to be larger than the purchase VAT. Should it ever occur that you still end up in a ‘net VAT receivable position’ from domestic sales, the receivables will simply be forwarded to the next period, and matched towards the sales VAT found therein. If using the numbers from the examples above, the net VAT receivables / payables will be calculated as follows: Note: A common practice, among quite many Chinese enterprises, involves holding back the issuance of the sales invoice until the client pays, in order to avoid having to pay the sales VAT before collecting the receivables from the client. Such a practice is strictly illegal by law, and can be penalised with a penalty equal to five (5) times the sales VAT plus 18% p.a. late payment interest (calculated from the date the sales VAT should have been paid and until the date it actually was paid). VAT Refund – Export Sales VAT is refunded in cash, in connection with export sales. The refund is not tied to the invoice date or export declaration date but the settlement date of your client abroad. Meaning, if you grant your client a sixty (60) days credit, you are also granting the tax bureau a similar credit on the VAT refund. Do note that you will have to pay 17% sales VAT, if the export sales invoice is being settled later than ninety (90) days counting from the export declaration date. Do also note that you will IF PURCHASED DOMESTICALLY IF IMPORTED FROM SUPPLIERS ABROAD Purchase price 100,000 100,000 Import duties 0 5,000 Sub total 100,000 105,000 Purchase VAT 17,000 17,850 Sum 117,000 122,850 IF SOLD DOMESTICALLY IF EXPORTED TO CLIENTS ABROAD Sales price 180,000 180,000 Sales VAT 30,600 0 Sum 210,600 180,000 VAT Sales VAT (180,000 x 17%) - 30,600 Purchase VAT (100,000 x 17%) + 17,000 Net VAT Payables 13,600 lose the right to be refunded in cash, if your company’s export ratio should drop below 50% of the total sales income. The VAT refund tied to export sales is cal- culated as follows: Export VAT refund = Purchase VAT – Non- refundable VAT The Non-refundable VAT (NRVAT) ratio is a function of the exported goods export declaration code (HS code). Furthermore, the NRVAT of a manufacturing company is based on the export sales price, and for a trading company, it is based on the purchase price of the exported goods. Let me illustrate this, by presuming that the NRVAT tied to the examples above is 5%. Then the net VAT receivables will be calculated as follows: My general advice to owners and managers of FIEs is as follows: (a) Do not take for granted that your company’s VAT is being calculated correctly. Do always obtain a second opinion from a competent third party in your own language. (b) The HS codes represents ‘the bible’ when it comes to both import duties and NRVAT. Make sure that you hire a competent and experienced person to head the import and export declaration works. ■ Photo by: Helge Hareland IF EXPORTED BY A MANUFACTURING COMPANY IF EXPORTED BY A TRADING COMPANY Sales VAT 0 0 Purchase VAT (100,000 x 17%) 17,000 17,000 NRVAT manufacturing (180,000 x 5%) - 9,000 0 NTVAT trading (100,000 x 5%) 0 - 5000 Net VAT receivables 8,000 12,000
Transcript of Ningbo Focus (July 2012)
BUSINESS ｜商业
26 ningbo focus July 2012 www.ningbofocus.com
TValue Added Tax (VAT) is not as straight forward in P.R. China as in the ‘West’. To make matters worse, not
all local finance managers working for FIEs are up to speed with respect to all of the elements of the VAT law which are relevant to you. The VAT competencies tied to foreign invested manufacturing companies (WFOE) tend to be good, while the same does not necessarily apply to foreign invested trading companies (FICE), with the result that fi nance managers with a manufacturing background may end up calculating the export VAT refund based on the regulations of a manufacturing company instead of a trading company. Such a comprehensive topic as VAT is ‘worthy a book’. Herein follows an executive summary of the VAT essentials:
VAT RateThe applicable VAT rate is 17%. This rate applies to goods and not services (a trial project launched in Shanghai may result in VAT being introduced to services later on).
Purchase VATIf presuming that the cost of the purchased goods is net RMB 100,000 before VAT, and presuming that the import duties tied to importing the same product amounts to 5% based on the applicable import code (HS code) of the product, the Purchase VAT will be calculated as follows:
Note: The purchase VAT will remain ‘un-classifi ed’ until the goods are being exported or sold domestically, whereupon the correct VAT refund classifi cation will be made in your books. The purchase VAT is calculated in the same way for both manufacturing and trading companies.
Sales VATIf presuming that the sales price of the sold
VALUE ADDED TAX (VAT)For Foreign Invested Enterprises (FIEs) in Ningbo
An executive summary of the applicable lawsBy Helge Hareland
Helge Hareland
goods is net RMB 180,000 before VAT, the Sales VAT will be calculated as follows:
Note: The sales VAT is calculated in the same way for both manufacturing and trading com-panies.
VAT Refund – Domestic SalesVAT is not refunded in cash, in connection with domestic sales, as the sales VAT is supposed to be larger than the purchase VAT. Should it ever occur that you still end up in a ‘net VAT receivable position’ from domestic sales, the receivables will simply be forwarded to the next period, and matched towards the sales VAT found therein. If using the numbers from the examples above, the net VAT receivables / payables will be calculated as follows:
Note: A common practice, among quite many Chinese enterprises, involves holding back the issuance of the sales invoice until the client pays, in order to avoid having to pay the sales VAT before collecting the receivables from the client. Such a practice is strictly illegal by law, and can be penalised with a penalty equal to fi ve (5) times the sales VAT plus 18% p.a. late payment interest (calculated from the date the sales VAT should have been paid and until the date it actually was paid).
VAT Refund – Export SalesVAT is refunded in cash, in connection with export sales. The refund is not tied to the invoice date or export declaration date but the settlement date of your client abroad. Meaning, if you grant your client a sixty (60) days credit, you are also granting the tax bureau a similar credit on the VAT refund. Do note that you will have to pay 17% sales VAT, if the export sales invoice is being settled later than ninety (90) days counting from the export declaration date. Do also note that you will
IF PURCHASED DOMESTICALLY
IF IMPORTED FROM SUPPLIERS ABROAD
Purchase price 100,000 100,000
Import duties 0 5,000
Sub total 100,000 105,000Purchase VAT 17,000 17,850
Sum 117,000 122,850
IF SOLD DOMESTICALLY
IF EXPORTED TO CLIENTS ABROAD
Sales price 180,000 180,000Sales VAT 30,600 0Sum 210,600 180,000
VATSales VAT (180,000 x 17%) - 30,600Purchase VAT (100,000 x 17%) + 17,000Net VAT Payables 13,600
lose the right to be refunded in cash, if your company’s export ratio should drop below 50% of the total sales income.
The VAT refund tied to export sales is cal-culated as follows: Export VAT refund = Purchase VAT – Non-refundable VAT
The Non-refundable VAT (NRVAT) ratio is a function of the exported goods export declaration code (HS code). Furthermore, the NRVAT of a manufacturing company is based on the export sales price, and for a trading company, it is based on the purchase price of the exported goods. Let me illustrate this, by presuming that the NRVAT tied to the examples above is 5%. Then the net VAT receivables will be calculated as follows:
My general advice to owners and managers of FIEs is as follows: (a) Do not take for granted that your company’s VAT is being calculated correctly. Do always obtain a second opinion from a competent third party in your own language. (b) The HS codes represents ‘the bible’ when it comes to both import duties and NRVAT. Make sure that you hire a competent and experienced person to head the import and export declaration works. ■
Photo by: Helge Hareland
IF EXPORTED BY A MANUFACTURING
COMPANY
IF EXPORTED BY A TRADING
COMPANYSales VAT 0 0Purchase VAT (100,000 x 17%) 17,000 17,000
NRVAT manufacturing (180,000 x 5%)
- 9,000 0
NTVAT trading (100,000 x 5%) 0 - 5000
Net VAT receivables 8,000 12,000
BUSINESS ｜商业
July 2012 ningbo focus 27www.ningbofocus.com
国内出售 国外出售
销售价格 180,000 180,000销项税 30,600 0总额 210,600 180,000
增值税
销项税 (18,0000 x 17%) - 30,600进项税 (10,0000 x 17%) + 17,000应付增值税 13,600
中国的增值税并不像西方世界那样直接。让情况更糟糕的是，并非所有在当地外资企业工作的财务经理都时刻了解增值税法的最新内容。与外商投资制造企业息息相关的增值税业务能力趋于较好，而这并不一定适用于外商投资贸易企业，结果便是拥有制造业背景的财务经理在计算增值税出口退税时以制造企业的规则作为依据而不是贸易企业。像增值税这样如此综合、复杂的话题往往需要写一本书来进行阐述说明。因此，以下便是一份关于增值税的综合概要：
增值税率基本增值税率为 17%。这一税率适用于
商品而非服务（上海的一个试验性项目很可能在日后将增值税引入到服务行业）。
进项税假设已购商品的税前成本为 10 万元，根
据商品适用进口编码（HS 编码）同类商品的进口税为 5%，那么购购买增值税的计算方式为：
注：在商品出口或者在国内出售之后，进项税才能被“分类”，于是您可以在记事本上将准确的增值税退税分类进行记录。进项税的计算方式对生产商和贸易商而言是相同的。
销项税假设商品税前销售价格为 18 万元，那么
销项税的计算方式为：
注：销项税的计算方式对生产商和贸易商而言是相同的。
应退税款——国内销售在国内销售方面，增值税不以现金形式退
还，因为销项税往往比进项税的数额更大。万一发生情况，您还是应该在国内销售上做好应收增值税，该应收税款将会传到下一个阶段，
与销项税的其中一项对应。如果使用上述数据，那么应收 / 应付增值税的计算方式为：
注：在众多中国企业中有这样一种惯例：公司直到客户付款后才会提供销售发票，这是为了防止在收到客户付款之前支付销项税。事实上，这种做法是法律明令禁止的，并可处以销项税加上 18% 滞纳金的五倍的罚款（始于销项税应付之日，止于实际支付销项税之日）。
增值税出口退税在出口销售方面，增值税以现金形式退税。
退税与发票日期或出口申报日期无关，而取决于国外客户的结算日期。换而言之，假如您给客户提供 60 日的还款日期，与此同时您也给了税务部门一个相似的退税时限。请务必注明，如果出口销售发票从出口申报日期起超过 90天仍未结算，那么您将失去这笔增值税退税税款。此外，请同时注明，如果您公司的出口率低于总销售收入 50%，那么您将无权获取现金退税。
增值税出口退税的计算方式为：增值税出口退税 = 进项税 - 不可退增值税
不可退增值税比率是出口商品出口申报编码的一项功能。另外，制造企业的不可退增值税根据出口销售价格而定，贸易企业的不可退
增值税则依据出口商品的购入价格而定。下面，请允许我对此进行阐释，我们假定上述例子中的不可退增值税为 5%。那么，应收增值税的计算方式为：
以下是我对外资企业所有者以及管理人员的建议：（1）请勿想当然地认为自己公司的增值税计算是正确的。随时从具有竞争关系的第三方获取补充性意见。（2）当 HS 编码涉及进口税和不可退税时，它便代表“圣经”。请确保您招用来从事进出口申报工作的人员富有经验且能够胜任该项工作。 ■
图片来源：Helge Hareland
The Author Helge Hareland is the Founding Partner at Hareland Capital Ltd (www.hareland.com) and Chairman at Point Services (Ningbo) Co Ltd (www.point-services.net). Helge has been living and working in Ningbo since July 2000. In addition to be an investor and company owner, he is also a specialist in corporate structuring and fi nancing. Helge
is an advisor to foreign investors planning to invest in China and Chinese investors seeking investment opportunities abroad. He can be reached at [email protected] and [email protected].
作者 Helge Hareland 是 Hareland 资本有限公司（www.hareland.com）的创建人，同时也是Point 服务（宁波）有限公司（www.point-services.net）的董事长。Helge 从 2000 年 7 月开始便在宁波居住工作。他除了投资、自营企业之外，还是一个企业组织和理财方面的专家。Helge为想在宁波投资的外商以及想去国外寻求投资机遇的中国人做顾问。您可以通过以下方式联系到他：[email protected] 和 [email protected]。
作者：Helge Hareland 翻译：王晶莹
增值税 特为在甬外资企业提供适用法律的执行纲要
国内购入 国外购入
购买价格 100,000 100,000进口税 0 5,000小计 100,000 105,000进项税 17,000 17,850总额 117,000 122,850
由生产商出口 由贸易商出口
销项税 0 0进项税 (10,0000 x 17%) 17,000 17,000
制造业不可退增值税 (180,000 x 5%) - 9,000 0
贸易业不可退增值税(100,000 x 5%) 0 - 5000
应收增值税 8,000 12,000
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