Important! These Chinese Fapiaos Are No Longer Valid

Huge changes regarding China's tax system are coming in 2019. Those include a merger between the state and local tax authorities, the introduction of electronic fapiaos nationwide, and China's new individual tax law.

Image: zhidao.baidu

How to use and issue a fapiao is going to be much different now. If you’re planning to work and live in China, one of the most important aspects of your life that you must know about is the issuance of fapiaos (invoices) which have been integrated into China's credit system. The latest tax rule gives China tax authorities the right to prevent lawbreakers from leaving China.

01

What's the new fapiao like? 

According to the No. 41 document from the "Notice on the Use of VAT Electronic Fapiaos" released by the State Administration of Taxation Announces in July 2018, China has unified new stamps for fapiaos nationwide. Fapiaos using the old version’s stamp cannot be used as of December 31, 2018.

This means that fapiaos using the old version’s stamp cannot be used to reimburse certain invoices starting January 1st, 2019. It shouldn’t come as a surprise, however, as institutions affected by this change should have prepared for it since the date the document was released almost half a year ago.

Here are the comparisons between the old and new stamp on fapiaos.

Old version’s stamp on fapiaos issued by local tax authorities:

New version’s stamp on fapiao issued by the State Administration of Taxation:

The shape of the new stamp is elliptical, its size the same as the old version, and the inner ring is engraved with a thin line. 

The upper side of the inner ring reads the words “National Unified Invoice Supervision”. The middle line reads “State Administration of Taxation” and the bottom one indicates the local tax authority, such as “Guangdong Taxation Bureau” for instance.

02

How does this new fapiao impact you?

Not too much. As long as the General VAT Fapiao and the Special VAT Fapiao are issued by the State Administration of Taxation, they can still be used. Regardless, you should always double check all the fapiaos you receive to make sure the State Administration of Taxation stamp is included on it.

However, it’s fair to assume that the State Administration of Taxation’s name should always be included on your new fapiaos’ stamp as most institutions that have the right to issue fapiaos must have completed all the requirements to switch to new fapiaos in the first place. 

Unfortunately, VAT fapiaos with the stamp from local tax authorities as opposed to that of the State Administration of Taxation are useless now.

03

WeChat is used to increase central supervision on fapiao management

Tax authorities in Shenzhen and Tencent, the holding company of WeChat, have integrated blockchain technology into WeChat for immutable and transparent record-keeping, steadily putting an end to paperback corruption on fapiaos.

Image: db.sanjiaoling.com

Tencent has created a pilot blockchain ecosystem for fapiaos designed for comprehensive use by consumers, merchants and tax authorities, according to local publications. The debut fapiao was issued by a local restaurant, while several other Shenzhen businesses have already been granted access to the system, including a parking lot, auto repair shops and cafes.

Cai Yunge, the general manager of blockchain at Tencent, announced that the new system achieves “a frictionless link between consumers and tax services.” Consumer payments are facilitated through Tencent’s WeChat Wallet and WeChat Pay, and a fapiao suitable for further inspection and management by tax authorities is reportedly generated in only “one click.”

A blockchain-backed e-fapiao only requires the user to click once during checkout through WeChat. Once this process is completed, all they have to do is wait and track the status of their reimbursement which can be done in real-time via the app. This new process leaves no room for forging or over-reporting. 

Moreover, the technology also has the advantage of improving data privacy through encryption and can provide an overall cost-effective streamlining of such processes, as multiple reviewing parties have been excluded from this. Blockchain technology is likely to be adopted for fapiao management nationwide very soon.

Source: HiTouch/ cointelegraph.com/ 3g.163.com

Editor: Crystal Huang

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