VAT treatment for sale of self-used fixed assets

--Simplified method to be used to calculate VAT payment when selling self-used fixed assets under certain circumstances--

The State Administration of Taxation (SAT) made an announcement with respect to VAT treatment for sales of self-used fixed assets  by VAT General Taxpayers on January 06, 2012. According to the announcement, a VAT general taxpayer selling its self-used fixed assets under the following two circumstances, may be charged VAT at the tax rate of 4% and subsequently reduced by half (i.e., 2%) using the simplified calculation method (which does not allow input VAT to be deducted from output VAT):

I. The taxpayer is a small-scale taxpayer when purchasing or homemaking the fixed assets and sells such fixed assets after being recognized as a general taxpayer.

II. The VAT general taxpayer conducts taxable activities on which the VAT shall be levied through the simplified method, and sells fixed assets whose input VAT shall not be deducted and is not deducted.

The VAT general taxpayer shall not issue a VAT Special Invoice when this specific VAT charge takes place.

The announcement will come to effect on February 01, 2012. Any unsettled tax issues prior to the effective date shall be treated according to the announcement.

Beijing - Shanghai - Shenzhen - Hong Kong - Paris

Copyright © 2009-2017 S.J.Grand. All rights reserved.