Starting from January 1, 2009, a new Provisional VAT Regulation will be implemented nationwide. The input VAT for purchasing equipment can also be offset. At the same time, the policy of exempting VAT on imported equipment will be canceled. May I ask whether the VAT levied on imported equipment next year can be offset like the domestic procurement input VAT?
The "Provisional Regulations of the People's Republic of China on Value-Added Tax" (Decree No. 538 of the State Council of the People's Republic of China, 2008) stipulates:
Article Eight: The VAT paid or borne by taxpayers when purchasing goods or receiving taxable services (hereinafter referred to as purchasing goods or taxable services) is considered as input tax.
The following input taxes are allowed to be deducted from the output tax:
(1) The VAT amount specified on the special VAT invoice obtained from the seller.
(2) The VAT amount specified on the customs import VAT special payment receipt obtained from the customs.
Article Ten: The input tax of the following items cannot be deducted from the output tax:
(1) Purchased goods or taxable services used for non-VAT taxable projects, VAT-exempt projects, collective welfare, or personal consumption;
(2) Non-normal losses of purchased goods and related taxable services;
(3) Non-normal losses of semi-finished and finished products that consume purchased goods or taxable services;
(4) Consumer goods for self-use specified by the Ministry of Finance and Taxation of the State Council;
(5) Transportation costs of goods specified in Items (1) to (4) of this article and transportation costs of VAT-exempt goods.
According to the above regulations, starting from January 1, 2009, the VAT collected on imported equipment that complies with the above regulations can also be offset for general taxpayer enterprises.
Related recommendation: Focus on CNC to enhance the level of the machine tool industry.