Overdue VAT Deduction Vouchers may be Used for Input VAT Deductions

 In cases where general value-added tax (VAT) payers fail to have their VAT deduction vouchers verified at tax authorities within the required time limit due to certain objective reasons, they may still be allowed to recover that part of input VAT, the State Administration of Taxation (SAT) said recently.

The SAT issued two announcements – the “Announcement on Abolishing Regulations that Forbid Overdue VAT Deduction Vouchers from Being Used for Input VAT Recovery (SAT Announcement [2011] No.49)” and the “Announcement on Issues Concerning Overdue VAT Deduction Vouchers Used for Input VAT Recovery (SAT Announcement [2011] No.50)” – on September 14 to clarify circumstances where VAT general taxpayers may use overdue VAT deduction vouchers for input VAT deductions.

According to Announcement No.49, part of Article Three in the previous SAT document “The Opinions on Promoting the Wide Use of the Anti-fraud VAT Control System (guobanfa [2000] No.12)” – which stipulated “VAT special invoices that can be used for input VAT recovery shall be verified at tax authorities within the required time limit; those that fail to be verified in time shall not be used as vouchers for VAT recovery” – will be abolished starting from October 1, 2011.

Announcement No.50 provides that VAT general taxpayers may still be able to go through input VAT recovery procedures if they fail to have their VAT deduction vouchers verified in time due to objective reasons. Possible objective reasons are listed as follows:

• Force majeure events such as natural disasters and local emergencies
• Incidents where the VAT deduction vouchers are stolen, snatched, lost during mail delivery or wrongly delivered
• Situations where the VAT deduction vouchers are detained by related juridical or administrative departments for their own work procedures, or where the VAT deduction voucher verification is not conducted in a timely manner due to tax authorities’ network failure
• Situations where the VAT deduction vouchers are not delivered promptly due to economic disputes between the involved trading partners, or where the taxpayers need an extended amount of time to complete tax re-registration due to a change of tax payment place
• Situations where the enterprise’s taxation personnel are absent due to sudden death, injury, serious disease and unannounced leave from work so that work handover cannot properly proceed
• Other situations stipulated by the SAT

VAT general taxpayers that want to submit the overdue VAT deduction vouchers for input VAT recovery shall go through procedures in accordance with the “Administration Measures for Overdue VAT Deduction Vouchers Used for Input VAT Recovery” attached in Announcement No.50.

Announcement No.50 will also take effect on October 1, 2011.

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