The First-Levy-Then-Refund VAT Policy Promotes the Development of the Printing and Publishing Industry

[ppzhan summary] 2013 was truly a troubled year for the traditional printing and publishing industry. But the Notice on Extending the Preferential Policies for Value-Added Tax and Business Tax on Publicity and Culture brought a touch of warmth to this "harsh winter".

The Notice on Extending the Preferential Policies for Value-Added Tax and Business Tax on Publicity and Culture, dubbed by the industry as a "New Year gift package for the news and publishing industry", has recently been officially issued by the Ministry of Finance and the State Administration of Taxation. According to the Notice, before the end of 2017, the preferential policies for value-added tax and business tax on publicity and cultural undertakings will be extended after appropriate adjustment.

The Notice shows that from January 1, 2013 to December 31, 2017, there are two kinds of policies of collecting VAT first and refunding it later at the publishing stage: one is the policy of collecting 100% of VAT first and refunding it later, and the other is the policy of collecting 50% of VAT first and refunding it later. In addition, VAT is exempted at the book wholesale and retail stages. Business tax is exempted on the ticket revenue of popular science units, and on the ticket revenue of popular science activities carried out by Party and government departments at or above the county level (including county-level cities, districts and banners) and by science and technology associations. From January 1, 2013 to July 31, 2013, business tax is exempted on the income obtained by overseas entities from transferring the broadcasting rights of popular science film and television works to domestic popular science units.

Publications subject to the policy of collecting 100% of VAT first and refunding it later at the publishing stage include: official newspapers and official periodicals of organizations at all levels of the Communist Party of China and the various democratic parties; official newspapers and official periodicals of people's congresses, Chinese People's Political Consultative Conference committees, governments, trade unions, Communist Youth Leagues, women's federations, federations of disabled persons and science and technology associations at all levels; official newspapers and official periodicals of Xinhua News Agency; and official newspapers and official periodicals of military departments.

Newspapers and periodicals published and distributed specifically for children and young people, student textbooks for primary and secondary schools, newspapers and periodicals published and distributed specifically for the elderly, publications in ethnic minority languages, Braille books and Braille periodicals, publications published by publishing units approved and registered in the five autonomous regions of Inner Mongolia, Guangxi, Tibet, Ningxia and Xinjiang, and 17 specific books, newspapers and periodicals including "Banyue Tan", "Legal Daily" and Chinese-language teaching materials (including multimedia teaching materials) compiled under the organization of the Overseas Chinese Affairs Office of the State Council with the words "This book is presented free of charge by the Overseas Chinese Affairs Office of the State Council to promote overseas Chinese-language education" printed on the back cover. The policy of collecting 100% of VAT first and refunding it later also applies to the printing or production of publications in ethnic minority languages and to the printing business of printing enterprises in the Xinjiang Uygur Autonomous Region.

For newspapers subject to the policy of collecting 50% of VAT first and refunding it later at the publishing stage, the Notice lists the names. Comprehensive newspapers such as current-affairs newspapers and externally-oriented publicity newspapers, economic newspapers, news and publishing newspapers, and industry- and sector-specific newspapers in 10 fields including industrial newspapers fall within the scope of this policy.

It is worth noting that the Notice requires that taxpayers enjoying the policy of collecting VAT first and refunding it later must be publishing units holding the relevant publication publishing license (including publishing units that have obtained exclusive publishing rights by way of plate leasing for the printing and distribution of publications). Units undertaking publishing and distribution tasks designated by publishing administrative departments at or above the provincial level, and publishing units that have not yet completed the publishing and distribution licensing formalities due to restructuring or reorganization, may enjoy the corresponding policy of collecting VAT first and refunding it later after verification and approval by the financial supervision commissioner's offices of the Ministry of Finance stationed in various localities in consultation with the provincial publishing administrative departments.

The Notice stresses that taxpayers shall keep separate financial accounting for the publications that enjoy the above tax preferential policies; those that do not keep separate accounting may not enjoy the preferential policies stipulated in the Notice. Publications that violate regulations, and publishing units and book wholesale and retail units that have violated regulations multiple times, may not enjoy the preferential policies stipulated in the Notice; the specific lists of such violating publications, publishing units and book wholesale and retail units shall be promptly notified by publishing administrative departments at or above the provincial level to the corresponding financial supervision commissioner's offices and the competent tax authorities. Electronic publications that already enjoy the VAT refund policy as software products may no longer apply for the policy of collecting VAT first and refunding it later under this Notice.

It should also be noted that this Notice takes effect from January 1, 2013, and the Notice of the Ministry of Finance and the State Administration of Taxation on Continuing the Preferential Policies for Value-Added Tax and Business Tax on Publicity and Culture (Cai Shui [2011] No. 92) is repealed at the same time. Where taxes have already been collected and turned over to the treasury before this Notice is received, they may be offset against the VAT and business tax payable by the taxpayer in subsequent months or be refunded from the treasury. If a taxpayer has already issued special VAT invoices to the purchaser, it shall recover the special invoices before applying for tax exemption. Where the special invoices cannot be recovered, VAT shall be collected in accordance with the regulations in all cases.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-361821.html