Business China

China Invoice Issue

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Given the importance and Chinese characteristics of China invoice (“Fapiao” in Chinese), nearly all foreign enterprises have questions regarding China’s Invoice (Fapiao) after they established their WFOEs or Joint Ventures. The latest VAT (Value Added Tax) Invoice reform in China makes the invoice system in China harder to understand.

The Logic behind China Invoice (Fapiao)

China adopts the system of “control tax-collection by invoices,” in other words, China controls tax payment utilizing tracking official invoices. China invoices (Fapiao) have the same templates and must apply from the tax bureau. Take VAT particular invoice, for instance, each invoice has valid invoice code and can only print by the billing machine bought from the tax bureau. Furthermore, the tax deduction application process and China tax rate ratify includes the invoice verification by the tax office networking system.

China Invoice (Fapiao) Definition & Application Range

Fapiao is a Chinese characteristic, which does not exist outside of China. In China, all business transactions are required by law to record on an official receipt, which called Invoice (“Fapiao” in Chinese). Invoice refers to business payment vouchers issued and collected in the buying and selling commodities, providing or accepting services as well as engaging in other business activities. China invoice (Fapiao) is the original basis of accounting as initial supporting evidence of cost, expense or income and the critical foundation of audit institutions and the tax authority inspection.

Fapiao must print on official receipt applied from the tax authorities. Otherwise, the business transaction will not recognize by the tax authority. Hence, the company will be unable to use the expense for tax refund or deduction. Inside the company, an employee must submit official Fapiao under company name to declare the costs for reimbursement. Please aware each company is also required by law to implement business within business scope, so as the issue of fapiao.

Please noted that for an employee should submit the official China invoice (Fapiao) to claim payment or refund. For example, the travel expense.

China Invoice (Fapiao) Sample

China Invoice (Fapiao) Types

There are two types of taxpayers in China:

  • Small-scale VAT Taxpayer
  • General VAT Taxpayer

Fapiao (Invoice) can classify into two categories:

  • General VAT Fapiao (Invoice) – General VAT Fapiao (Invoice) can apply under small-scale VAT taxpayer and general VAT taxpayer.
  • Special VAT Fapiao (Invoice) – This type can be used for the tax deduction and can merely apply under the General VAT Taxpayer status.

China Invoice (Fapiao) Sample

China Invoice (Fapiao) Sample

The invoice content includes invoice head, invoice code, sheets of invoice, usage, the customer’s name, bank account, business (product) name, units of measurement, quantity, unit price, amount, the amount in the capital, handler name, company seal, billing date, etc. The value-added tax particular invoices used by the companies that implement the value-added tax should also classify of fees, tax rates, tax amount and so on.

Generally, the basic couplet of special VAT invoices is a total of three sheets, which are used as follows:

The first sheet is the bookkeeping sheet, which is the main voucher for the sales and VAT on sales, namely the seller's accounting voucher.

The second sheet is tax deduction sheet, the proof of the amount of input tax calculated on the buyer. The buyer should number, bind, send tax authorities to check after receiving this sheet according to the provisions of the tax authority.

The third sheet is the invoice sheet, and invoice receiver will take this original voucher for payment or collection. It belongs to the business voucher, namely the buyer's accounting certificate.

And the first sheet of the general invoice of value-added tax has two layers, namely bookkeeping sheet and invoice sheet, be less than VAT particular invoice deduction sheet.

China Fapiao (Invoice) Code

China Invoice (Fapiao) is a row number in the upper right corner of the China invoice (Fapiao), which bears the method of the authenticity of the invoice. The Special VAT Invoice has ten digits 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 financial management;
  • 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 form of Increasing the Number of Approved Invoices
  • Tax Registration Certificate
  • Business License
  • Legal Person Identity Card
  • Tax Application Form
  • Company Seal
  • Enterprise Income Tax Verification Collection (3)
  • Application Letter
  • Financial Staff’s Identity Card
  • Financial Staff’s Accounting Certificate
  • Tax Payers’ Registration Form
  • Corporate Income Tax Check (1 sheet)

China Invoice Issue Services Include:

  • China Invoice Application
  • Buying and Keeping of China Invoice Billing Machine
  • China Invoice Issue by Accountant
  • China Invoice Certify
  • Small-scale Taxpayer Application
  • General Taxpayer Application
  • China Invoice Cancellation


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