Notice of the Ministry of Finance and the State Administration of Taxation on the Value-added Tax Policy for Software Products

 

Finance and Taxation [2011] No. 100

 

Provinces, autonomous regions, municipalities directly under the Central Government, cities with separate plans, State Taxation Bureau, local taxation bureau, Xinjiang Production and Construction Corps Finance Bureau:

 

In order to implement the relevant spirit of the "Notice of the State Council on Printing and Distributing Several Policies to Further Encourage the Development of the Software Industry and the Integrated Circuit Industry" (Guo Fa [2011] No. 4), to further promote the development of the software industry and promote China's informatization construction, we are adding value to software products. The tax policy notice is as follows:

 

I. VAT policy for software products

 

(1) Value-added tax General taxpayers who sell their self-developed software products and levy value-added tax at a rate of 17% will implement a policy of immediate reimbursement for the portion of their actual VAT burden exceeding 3%.

 

(2) Value-added tax General taxpayers sell imported software products after localization and transformation, and the software products they sell can enjoy the VAT refund policy as stipulated in the first paragraph of this article.

 

Localization transformation refers to the redesign, improvement, and conversion of imported software products. The mere processing of Chinese characters on imported software products is not included.

 

(3) The taxpayer is entrusted to develop software products, and the copyright belongs to the trustee's levy of value-added tax. The copyright belongs to the client or the joint ownership of the value-added tax. For copyright and ownership, no value-added tax is levied.

 

Definition and classification of software products

 

Software products referred to in this notice refer to information processing programs and related documents and data. Software products include computer software products, information systems, and embedded software products. Embedded software products refer to software products that are embedded in computer hardware, machinery and equipment and are sold together, and form part of computer hardware, machinery and equipment.

 

3. Software products that meet the following conditions can enjoy the value-added tax policies stipulated in this notice after being reviewed and approved by the competent tax authorities:

 

1. Obtained the test certificate issued by the software testing agency recognized by the provincial software industry authority;

 

2. Obtain the Software Product Registration Certificate issued by the competent software industry department or the Computer Software Copyright Registration Certificate issued by the copyright administration department.

 

Calculation of VAT on software products

 

(1) Calculation method of VAT on software products:

 

Immediate tax refund amount = current software product VAT payable tax-current software product sales × 3%

 

Current software product VAT payable tax = current software product output tax-current software product deductible input tax

 

Current sales tax of software products = current sales of software products × 17%

 

(2) Calculation of VAT and VAT refund for embedded software products:

 

1. Calculation method of VAT and VAT refund for embedded software products

 

Immediate tax refund amount = current VAT payable value of embedded software products-current sales of embedded software products × 3%

 

Current value-added tax tax of embedded software products = output tax of current embedded software products-input tax deductible for current embedded software products

 

Current output tax of embedded software products = current sales of embedded software products × 17%

 

2. Calculation formula for current sales of embedded software products

 

Current sales of embedded software products = Total sales of current embedded software products and computer hardware, machinery and equipment-Current sales of computer hardware, machinery and equipment

 

The sales of computer hardware and machinery and equipment are determined in the following order:

 

① Determined based on the average sales price of similar goods of the taxpayer in the most recent period;

 

② Calculated and determined based on the average sales price of similar goods of other taxpayers in the latest period;

 

③ It is calculated and determined according to the taxable price of computer hardware, machinery and equipment.

 

Computer hardware, machinery and equipment composition tax price = computer hardware, machinery and equipment cost × (1 + 10%).

 

5. Calculated in accordance with the above measures, that is, when the tax rebate amount is greater than zero, the tax authorities shall handle the tax refund procedures in a timely manner in accordance with regulations.

 

6. For general value-added taxpayers who sell software products while selling other goods or taxable services, the input tax that cannot be divided shall be determined according to the actual cost or the proportion of sales income for the input tax of software products; The input tax on equipment and tools for product development and production shall not be apportioned. The taxpayer shall report the selected allocation method to the competent tax authority for record, and shall not change it within one year from the date of record.

 

Equipment and tools dedicated to software product development and production, including but not limited to computer equipment for software design, reading and writing printing equipment, tool software, software platforms and testing equipment.

 

7. For general VAT taxpayers who sell embedded software products along with computer hardware and machinery equipment, if the provisions of this notice are applied to determine the sales of computer hardware and machinery equipment based on the calculated tax price, embedded software products shall be accounted for separately. And the cost of computer hardware, machinery and equipment. Those who have not separately accounted or are unclear in accounting shall not enjoy the value-added tax policy stipulated in this notice.

 

8. Tax authorities of provinces, autonomous regions, municipalities directly under the Central Government, and cities with separate plans may, in accordance with the provisions of this notice, formulate management measures for VAT on software products. The competent tax authority may conduct regular or irregular inspections on taxpayers enjoying the value-added tax policy stipulated in this notice. Any taxpayer who fraudulently obtains the value-added tax policy stipulated in this notice, the tax authorities shall, in addition to punishment in accordance with the current regulations, revoke their qualification to enjoy the value-added tax policy stipulated in this notice starting from the year in which the above-mentioned violations occurred. Apply again.

 

9. This notice shall be implemented from January 1, 2011. "Circular of the Ministry of Finance and State Administration of Taxation on Implementing the Decision of the CPC Central Committee and the State Council on Strengthening Technological Innovation, Developing High Technology, and Realizing Industrialization" (Cai Shui Zi [1999] No. 273) Article 1 Notice of the General Administration of Customs of the State Administration of Taxation on Encouraging the Development of the Software Industry and the Integrated Circuit Industry to Relevant Tax Policies (Caishui [2000] No. 25) Article 1, paragraph 1, "The State Administration of Taxation clarifies that electronic publications are software taxation Notice of Scope "(Guo Shui Han [2000] No. 168)," Notice of the State Administration of Taxation of the Ministry of Finance on Certain Value-added Tax Policies "(Caishui [2005] No. 165) Articles 11 Paragraphs 1 and 3," Fiscal Notice of the State Administration of Taxation on the Issue of Embedded Software VAT Policy (Caishui [2006] No. 174), "Notice of the State Administration of Taxation of the Ministry of Finance on Embedded Software VAT Policy" (Caishui [2008] No. 92), " Article 1 of the Circular of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Tax Policies for Supporting the Development of the Animation Industry (Caishui [2009] No. 65) shall be repealed at the same time.

 

State Administration of Taxation, Ministry of Finance

 

October 13, 2011