The invoice was rejected？ Don’t panic, remember these details and avoid issuing non-compliant invoices!

Accountant Xiao Zhang

Xiaobian, my customer said that the invoice I issued was not compliant and needed to be returned and reopened? What’s going on? I haven’t figured out what’s wrong yet, but I’m worried. Can you tell me something about it?

No problem! Xiaobian, this will take you to understand how to avoid issuing non-compliant invoices in practice ~

According to the provisions of Article 12 (State Taxation Administration of The People’s Republic of China Announcement No.28, 2018), invoices that are printed privately, forged, altered, invalidated, illegally obtained by the drawer, falsely made out and filled out irregularly (hereinafter referred to as "non-compliant invoices") shall not be used as pre-tax deduction vouchers.

In order to avoid issuing non-compliant invoices, Xiaobian sorted out five situations that are prone to mistakes. Let’s take a look!

1. The contents of the invoice, such as the name and amount, are inconsistent with the actual transaction.

According to Article 20 of the Measures for the Administration of Invoices in People’s Republic of China (PRC): All units and individuals engaged in production and business activities shall obtain invoices from the payee when purchasing goods, receiving services and paying for other business activities. When obtaining an invoice, it is not allowed to change the name and amount.

According to Article 2 of Announcement of State Taxation Administration of The People’s Republic of China on Issues Concerning the Issuance of VAT Invoices (State Taxation Administration of The People’s Republic of China Announcement No.16, 2017): When the seller issues VAT invoices, the contents of the invoices shall be truthfully issued according to the actual sales situation, and the contents inconsistent with the actual transaction shall not be filled in according to the requirements of the buyer.

Two, "the buyer’s taxpayer identification number" column did not fill in the buyer’s taxpayer identification number or unified social credit code.

According to Article 1 of the Announcement of State Taxation Administration of The People’s Republic of China on Issues Concerning the Issuance of VAT Invoices (State Taxation Administration of The People’s Republic of China Announcement No.16, 2017): Since July 1, 2017, if the buyer is an enterprise, the taxpayer identification number or unified social credit code shall be provided to the seller when requesting the general VAT invoice; When the seller issues an ordinary VAT invoice for it, it shall fill in the taxpayer identification number or unified social credit code of the buyer in the column of "taxpayer identification number of the buyer". Invoices that do not meet the requirements shall not be used as tax vouchers.

The enterprises mentioned in this announcement include companies, unincorporated enterprises as legal persons, enterprise branches, sole proprietorship enterprises, partnerships and other enterprises.

Iii. The remarks column of the invoice is not completely filled in as required.

According to Article 1 of State Taxation Administration of The People’s Republic of China Announcement on Issues Related to Stopping the Use of Special VAT Invoices for Cargo Transportation (State Taxation Administration of The People’s Republic of China Announcement No.99, 2015), general VAT taxpayers provide cargo transportation services and use special VAT invoices and ordinary VAT invoices. When issuing invoices, the departure place, arrival place, vehicle type and vehicle number, and information on transported goods should be filled in the remarks column of the invoice. If there are many contents, a separate list can be attached.

According to Item (3) of Article 4 of the Announcement of State Taxation Administration of The People’s Republic of China on Issues Concerning Tax Collection and Management in the Pilot Project of Changing Business Tax to Value-added Tax (State Taxation Administration of The People’s Republic of China Announcement No.23, 2016), when providing construction services, taxpayers should indicate the name of the county (city, district) and the name of the project in the remarks column of the invoice.

In addition, according to Article 5 of the Announcement of State Taxation Administration of The People’s Republic of China on Several Provisions on the Collection and Management of Land Value-added Tax after the Reform of the Camp (State Taxation Administration of The People’s Republic of China Announcement No.70, 2016), after the reform of the camp, land value-added tax taxpayers should indicate the name of the county (city, district) where the construction service occurred and the project name in the remarks column of the invoice, otherwise it will not be included in the land value-added tax deduction project amount.

According to Item (5) of Article 4 of the Announcement of State Taxation Administration of The People’s Republic of China on Issues Concerning Tax Collection and Management in the Pilot Project of Changing Business Tax to Value-added Tax (State Taxation Administration of The People’s Republic of China Announcement No.23, 2016), when renting real estate, taxpayers should indicate the detailed address of real estate in the remarks column when issuing VAT invoices by themselves or the tax authorities.

According to the Announcement of State Taxation Administration of The People’s Republic of China on the Issue of Issuing VAT Invoice for Collecting Travel Tax by Insurance Institutions (State Taxation Administration of The People’s Republic of China Announcement No.51, 2016), insurance institutions, as travel tax withholding agents, should indicate the information of collecting travel tax in the remarks column of VAT invoice when collecting travel tax and issuing VAT invoice. Specifically, it includes: insurance policy number, tax period (detailed to month), amount of travel tax collected, amount of late payment fee, total amount, etc. The VAT invoice can be used as the original accounting voucher for taxpayers to pay travel tax and late fees.

Fourth, the coding abbreviation is not printed correctly.

According to the Announcement of State Taxation Administration of The People’s Republic of China on Several Issues Concerning the Management of VAT Invoices (State Taxation Administration of The People’s Republic of China Announcement No.45, 2017), since January 1, 2018, when taxpayers issue VAT invoices (including special VAT invoices, general VAT invoices and electronic general VAT invoices) through the new VAT invoice management system, the abbreviations corresponding to the tax classification codes of goods and services will be automatically displayed and printed on the invoice face "Name of goods or taxable services" or "Name of services". See the Annex for the Classification and Coding Table of Goods and Services Taxes containing abbreviations.

5. Failing to issue invoices for refined oil as required.

According to Article 1 of State Taxation Administration of The People’s Republic of China Announcement on Relevant Issues Concerning the Collection and Management of Consumption Tax on Refined Oil (State Taxation Administration of The People’s Republic of China Announcement No.1 in 2018), all refined oil invoices must be issued through the refined oil invoice issuing module in the new VAT invoice management system. When issuing refined oil invoices, the following rules shall be observed:

1. Correct selection of tax classification codes for goods and services.

2. The "unit" column of the invoice should be "ton" or "liter", and the "quantity" column of the blue-ink invoice is required and not "0".

3. After issuing special invoices for refined oil products, in case of sales returns, incorrect invoicing and sales discounts, special invoices for refined oil products in scarlet letters shall be issued according to regulations.

If the sales quantity is involved due to reasons such as returned sales and incorrect invoicing, the corresponding quantity should be filled in the Information Form for Issuing Special VAT Invoices in Red Letter, and the quantity should not be filled in for sales discounts.

4. The total amount of oil products that can be invoiced for a commodity and service tax classification code of a refined oil distribution enterprise should not be greater than the total amount of oil products with the same commodity and service tax classification code corresponding to the special invoices for refined oil products and the special payment book for customs import consumption tax.

Accountant Xiao Zhang

Ah ~ I see! Remember it in a small notebook, issue a compliance invoice, and start with the details!

Source: China Tax News, Shanghai Tax.

Original title: "The invoice was rejected? Don’t panic, remember these details and avoid issuing non-compliant invoices! 》

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