According to the provisions of the "Provisional Regulations of the People's Republic of China on Value-Added Tax" and its detailed rules for implementation:
1. In order to coordinate the management of value-added tax special invoices, the current VAT system classifies VAT taxpayers into general taxpayers and small-scale taxpayers based on two criteria: the size of the taxpayer's annual sales and the level of accounting management.
2. Individual businesses are taxpayers who operate with personal or family capital and obtain an individual industrial and commercial business license. Individuals (i.e., individual operators and other individuals) whose annual taxable sales exceed the standard for small-scale taxpayers are regarded as small-scale taxpayers by analogy.