Circular of the State Administration of Taxation on Issuing the Measures for the Supervision and Administration of Value-added Tax (VAT) Tax-control System Service Providers

Circular of the State Administration of Taxation on Issuing the Measures for the Supervision and Administration of Value-added Tax (VAT) Tax-control System Service Providers

Shui Zong Fa [2015] No. 118

October 9, 2015

The offices of the State Administration of Taxation of all provinces, autonomous regions, municipalities directly under the Central Government, and cities specifically designated in the state plan,

To further strengthen tax authorities' supervision and administration of VAT tax-control system service providers, and to continuously optimize the invoicing services provided to VAT payers, the State Administration of Taxation ("SAT"), based on extensive consultations, has introduced new Measures for the Supervision and Administration of Value-added Tax (VAT) Tax-control System Service Providers (the "Measures"), and we hereby issue the Measures to you and notify you of related matters as follows:

I. Taxpayers may voluntarily choose to use the VAT tax-control system dedicated equipment produced by Aisino Corporation (Aisino) or the National Information Security Engineering Center (NSEC).

II. Taxpayers may voluntarily select qualified maintenance service providers ("Service Providers") for services. Service providers can provide maintenance services for dedicated equipment produced by Aisino or the NSEC.

III. Service providers shall provide VAT tax-control system operation training according to the principle of voluntariness, and chargeable training, forced training, and forced tie-in sale of general equipment, software, or other commodities are prohibited.

IV. The tax authorities shall make full disclosure of relevant matters such as the standards for dedicated equipment sale price and technical maintenance charges and the basic configuration standards for VAT tax-control system dedicated equipment so as to accept taxpayers' supervision.

V. The tax authorities shall attach great importance to taxpayers' complaints regarding service providers. The tax authorities at all levels shall set up telephone numbers to receive complaints and reporting and make them available to the public through various means, and timely deal with complaints filed by VAT tax-control system users regarding service providers. The provincial offices of the SAT shall be responsible for tracking the progress in the handling of complaints, make a summary on a monthly basis, and report the summary along with the service quality survey to the SAT.

VI. The tax authorities shall distribute a Notification of the Installation and Use of VAT Tax-control System (see Appendix I, hereinafter "Notification") to each taxpayer which is required to use the VAT tax-control system, notify the taxpayer of the relevant policies and its rights. Service providers shall sell dedicated equipment to taxpayers based on the Notification and provide after-sales services, and they are strictly prohibited from selling dedicated equipment to a taxpayer without producing the Notification.

VII. The tax authorities and tax staff are strictly prohibited from engaging in, directly or indirectly, commercial business activities relating to the tax-control system or from selling any product to taxpayers.

VIII. The tax authorities at all levels shall attach great importance to the supervision and administration of service providers, strictly implement the Measures, and perform their supervisory and administrative duties conscientiously. If the dereliction of duty and irregularities of the service providers become frequent in a jurisdiction, the entities or persons concerned shall be held accountable pursuant to the relevant regulations. For a jurisdiction which has weak supervision of service providers or has frequent problems, the SAT shall circulate a notice of criticism and set a deadline for rectification.

Measures for the Supervision and Administration of Value-added Tax (VAT) Tax-control System Service Providers

Chapter I General Provisions
　
Article 1 These Measures are formulated under the Law of the People's Republic of China on the Administration of Tax Levying and the Circular of the State Council on Forwarding the Opinions of the State Administration of Taxation on the Comprehensive Application of the Value-added Tax (VAT) Anti-falsification and Tax-control System (Guo Ban Fa [2000] No. 12), to ensure the normal operation of the VAT tax-control system and strengthen the supervision of service providers.
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