Tentative Measures for the Recognition and Annual Examinations of Taxpayers for Business Tax in Cargo Transportation Industry

Tentative Measures for the Recognition and Annual Examinations of Taxpayers for Business Tax in Cargo Transportation Industry

Guo Shui Fa [2003] No. 121 Appendix 3

October 17, 2003

Article 1 Theses Measures are hereby formulated in accordance with the Tentative Administrative Measures for the Imposition of Business Tax on the Cargo Transportation Industry issued by the State Administration of Taxation in order to apply recognition and annual examination system for taxpayers that issue invoices and taxpayers that use issued invoices in road or inland water goods transport sector (hereinafter referred to as "invoice-issuing taxpayers" and "taxpayers using issued invoices").

Article 2 Where it is necessary for an entity that provides road or inland water goods transport services (hereinafter referred to as "goods transport services") to apply to be treated as an invoice-issuing taxpayer, the entity shall go through recognition formalities with the competent local taxation bureau.

Article 3 Where an entity that provide goods transport services meets the following requirements, it may apply to the competent local taxation bureau to be recognized as an invoice-issuing taxpayer:
1. The entity has the business license checked and issued by an administrative authority for industry and commerce, the certificate of tax registration checked and issued by the local taxation bureau, and the license for road transport or the license for water transport checked and issued by an administrative authority for transport;
2. The value of goods transport services provided annually is more than RMB 200,000 (with the exception of newly-established enterprises);
3. The entity has a fixed business place. If the business place is leased, the lease period must be longer than 1 year;
4. The entity has opened a settlement account in a bank;
5. The entity has its own vehicles and provides goods transport services; and
6. The entity maintains complete account books and is able to keep in good conditions and use invoices and other documents in accordance with measures for the administration of invoices, accurately calculate the business income, business cost, tax, and business profits in accordance with the requirements of tax authorities and the financial accounting system, and to file tax returns and pay all types of tax to tax authorities pursuant to relevant provisions.

Article 4 Any of the following taxpayers shall not be recognized as an invoice-issuing taxpayer:
1. Any entity that fails to meet all of the requirements prescribed in Article 3 hereof;
2. Any contractor, lessee and affiliate (in the case of an invoice issuer, its fixed-amount of tax for a fixed period may, with the authorization of the competent tax authority, be withheld by the employer, lessor, and the party being affiliated) that fails to meet all of the following requirements ;
(1) Services are provided in the name of the employer, lessor, or the party being affiliated and relevant legal responsibilities are assumed by the employer, lessor, or the party being affiliated;
(2) All business income and expenditure are included in the financial accounting of the employer, lessor, and the party being affiliated;
(3) The distribution of benefits is based on the profits of the employer, lessor, and the party being affiliated.
3. Any individual who has transport vehicles.

Article 5 Any entity which applies to be recognized as an invoice-issuing taxpayer shall provide or produce the following relevant certificates and documents:
1. An application form of the entity;
2. A form for the recognition of invoice-issuing taxpayers in goods transport industry;
3. A photocopy of its business license;
4. A counterpart of its certificate of tax registration;
5. A photocopy of its license for road transport via vehicles and license for business transport via vessels;
6. A photocopy of its certificate of the ownership of any self-owned house or any house lease contract;
7. A photocopy of invoices for the purchase of self-owned vehicles; or
8. Other relevant certificates or documents required by a local taxation bureau to be provided.

Article 6 Procedures for applying to go through formalities for the recognition of invoice-issuing taxpayers:
1. For any existing entities that provide goods transport services, the following procedures shall be followed to go through recognition formalities:
(1) Application procedures: any entity that provides goods transport services shall submit an application form to the competent local taxation bureau and honestly fill out a Form for Recognition of Invoice-issuing Taxpayers in the Goods Transport Industry and other documents necessary for the recognition.
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