China Invoice (Fapiao) Overview
China Invoice (Fapiao) Types, Fapiao Sample and Fapiao Code
China Invoice (Fapiao) Services
Since issuing an invoice in China is one of the most important aspects of business in China, there are many foreign companies that are confused on taxes after setting up a Wholly foreign owned enterprise (WFOE) in China.
That said, the most recent tax reforms that’s been carried out by China makes the current invoice system complex for foreigners. This is why you need the experience and expertise of Business China when it comes to Fapiao management in China.
The Logic Behind China Invoice (Fapiao)
China works under the ‘Control Tax-Collection by Invoices’ system, which means that the country controls all tax payments by tracking official invoices. It is no surprise that invoices in China (Fapiao) use the same templates and are required to be submitted by the tax bureau.
For instance, when it comes to VAT invoices, each invoice has a valid invoice code. This means, it can be printed by the billing machine that’s bought by the tax bureau. Besides that, the tax deduction application process and the China tax rate includes the invoice verification by the tax office. This means for better Fapiao management in China, you are going to need a service that’s familiar with Fapiao in China. This is where Business China comes in.
China Invoice (Fapiao) Definition & Application Range
Foreign businesses usually have a hard time understanding Fapiao, mainly because the concept is only practiced outside of China. It is mandatory that establishing a business in China, all business transactions are required to record their transactions on an official receipt, which is commonly known as a ‘Fapiao’ in China. An ‘invoice’ refers to any business payment vouchers that are issued or collected in the buying or selling of commodities, or when providing or accepting services in China.
In a way, the Fapiao is considered to be the only legitimate method of accounting when it comes to recording the cost of a product or service, being provided or received.The Fapiao must be printed on an official receipt supplied by Chinese tax authorities, or else the business transaction is not going to be recognized by the Chinese tax authorities.
This is another reason you are going to need the professional services of Business China for establishing a business in China. A china invoice issue also needs to include the company name to declare the costs of reimbursement.
China Invoice (Fapiao) Types
You can also divide the China Tax Invoice (Fapiao) into two main types of Fapiao. The General VAT Invoice (Fapiao), and the Special VAT Invoice (Fapiao). The Special VAT Invoice can be utilized for tax deductions and can be applied by the general taxpayer (status). According to the law in China, every foreign business that is set up in the country will be identified as a ‘Small-Scale Taxpayer’ at the time of its establishment, which can later, be upgraded to the status of ‘General VAT Taxpayer’.
When it comes to Fapiao management in China there are basically two types of taxpayers;
- Small-scale VAT Taxpayer
- General VAT Taxpayer
Fapiao (Invoice) Can be Classified into Two Categories:
- General VAT Fapiao (Invoice) –This is applied under small-scale VAT taxpayer and general VAT taxpayer.
- Special VAT Fapiao (Invoice) – This is used for the tax deduction and can be applied for under the General VAT Taxpayer status.
China Invoice (Fapiao) Sample
The invoice contains the invoice head, invoice code, sheets of invoice, usage, the name of the customer, their bank account, business / product name, units of measurement, quantity, unit price, amount, and the amount of capital, handler name, company seal, billing date and so on. The value-added tax particular invoices that are used by a China WFOE should include the fees, tax rates, tax amount etc.
In normal Fapiao management in China, the couplet of special VAT invoices is the total of three sheets, which are as follows:
The first sheet in the Fapiao is the bookkeeping sheet. This is the main voucher for the sales and VAT on sales, namely the seller's accounting voucher.
The second sheet is the tax deduction sheet, which is the proof of the amount of input tax calculated on the buyer. In accordance with the provisions of the tax authority, and the China Invoice issue rules, it is the responsibility of the buyer to bind, number, and send it to the tax authorities to check after receiving this sheet.
The third sheet is the invoice sheet. The receiver of the invoice will take this original voucher for payment or collection. It belongs to the business voucher, namely the buyer's accounting certificate.
The first sheet of the general invoice of value-added tax has two layers, which is namely the bookkeeping sheet and the invoice sheet, and has fewer sheets than the VAT particular invoice deduction sheet.
China Fapiao (Invoice) Code
This is a row number that’s located in the upper right-hand corner of the Fapiao, and bears the method of authenticity of the invoice. There are 10 digits in a Special VAT Invoice, while the General VAT Invoice has 12.
The Significance of China Invoice (Fapiao)
- China Invoice is an indispensable part of tax compliance in China.
- China Invoice (Fapiao) has the characteristics of legality, authenticity, unity, and timeliness, which is one of the most fundamental accounting evidence.
- China Invoice (Fapiao) is the carrier of the content of economic activities, which is an essential tool for fapiao management in China.
- China Invoice is a crucial basis for tax authorities to control tax source and collect tax.
- China Invoice is a necessary means for the state to monitor economic activities, maintain economic order and protect the safety of state property.
China Invoice (Fapiao) Application Requirements
The process of a China Invoice (Fapiao) can be complex which is why you need the expertise of Business China for Fapiao management in China. The following are some of the requirements of a China Invoice (Fapiao)
- The form of Increasing the Number of Approved Invoices
- Tax Registration Certificate
- Tax Payers’ Registration Form
- Tax Application Form
- Legal Person Identity Card
- Financial Staff’s Identity Card
- Financial Staff’s Accounting Certificate
- Enterprise Income Tax Verification Collection (3)
- Corporate Income Tax Check (1 sheet)
- Company Seal
- Business License
- Application Letter
Our China Invoice Issue Services Include
- Buying and Keeping of China Invoice Billing Machine
- China Invoice Application
- China Invoice Cancellation
- China Invoice Certify
- China Invoice Issue by Accountant
- General Taxpayer Application
- Small-scale Taxpayer Application
- At Business China, we are a full-service company providing our clients with complete accounting, bookkeeping, financial statement, and tax compliance support services to safeguard your China expansion.
- Business China adheres to the “Internet+” philosophy to create the most convenient business service platform for our clients.
- Business China has put together an experienced and professional online team and quick-responding local team for Fapiao management in China.