Digital E-invoicing in China is Upon US!
On 30th November 2021, the Shanghai Municipal Taxation Bureau of the State Administration of Taxation issued Notice No. 3 of 2021[1], deciding to launch the pilot of fully digitalized electronic invoices (hereinafter referred to as all-electronic invoices) in Shanghai starting from 1st December 2021. The all-electronic invoices include “VAT special invoices” and “VAT ordinary invoices”. Invoice styles are as follows:
- Who will be the pilot taxpayer?
The scope of pilot taxpayers is determined by the Shanghai Taxation Bureau of the State Administration of Taxation. The scope of the invoice recipient is gradually extended to the whole city according to the progress of the pilot.
- What are the advantages of using an all-electronic invoice?
- Simpler ticketing process
- Easier invoicing
- Integration of recording and archiving
After passing the real-name verification, the pilot taxpayers do not need to use tax-controlled special equipment, apply for invoice type approval or receive all-electronic invoices, and can invoice using the online service platform[2]. After all functions of the e-invoicing service platform are online, all-electronic invoices can also be issued anytime and anywhere through the client and mobile phone app.
After logging into the e-invoice service platform, taxpayers can perform a series of operations such as invoicing, delivery, checking, usage checking and enjoy “one-stop” services, unlike before when they had to log into multiple platforms to complete relevant operations.
Taxpayers can deliver all-electronic invoices automatically through their tax digital accounts on the e-invoicing service platform, or they can deliver all-electronic invoices by themselves via email or QR codes.
- What is the “total amount issued”?
The tax authorities manage the total amount of invoicing for pilot taxpayers.
The total amount of invoicing refers to the upper limit of the total amount of invoices (excluding VAT) issued by the pilot taxpayer in a month.
The tax authorities determine the total amount of initial issuance by the pilot taxpayers based on the risk level, tax credit level and actual business situation of the pilot taxpayers.
The Notice shall come into effect on 1st December 2021, and pilot taxpayers may use the e-invoicing service platform to issue all-electronic invoices or use the VAT invoice management system to issue paper invoices, which shall still be managed in accordance with the original provisions.
In conclusion, we can say that these new regulations will simplify the process of issuing and monitoring invoices while pursuing the path of the digitization of Chinese accounting.
If you have any further questions, please feel free to contact us.
[1] Original announcement: http://shanghai.chinatax.gov.cn/zcfw/zcfgk/swzsgl/202111/t461197.html
[2] The e-invoicing service platform can be accessed at: https://etax.shanghai.chinatax.gov.cn
