If you plan to settle down in China by working or doing business for years to get a permanent residence. You have better have a good understanding of the connection among Fapiao, Taxation, Work Permit and Work Visa!
What's Chinese Fapiao?
Fapiao is a kind of official receipt, which served like invoices in foreign countries. It has the following purposes.
01
For Companies
Served for tax deduction or accounting.
02
For Individuals
■ Get reimbursed for any kind of purchase in China;
■ Return a purchase or access other possible after-sales services.
But Fapiao is special in China because it's actually issued by the government.
In reality, parts of a company’s taxes are calculated based on the amount of money issued in Fapiao over the relevant tax period.
Types of Fapiao & Their Liability
There are two major categories of fapiao, General Value-added Tax (VAT) Fapiao and Special Value-added Tax (VAT) Fapiao.
01
General VAT Fapiao
General VAT Fapiao is used as an evidence of payment where special VAT Fapiao does not apply.
For enterprises or individuals who are not able to issue special VAT Fapiao (such as general commercial taxpayers who retail cigarettes, alcohol, food, clothing, shoes and hats, makeup, and other consumer goods).
02
Special VAT Fapiao
The special VAT Fapiao, is used for tax deduction purposes, it contains a lot more detailed information (including the trader’s tax code, address, telephone number and bank account information).
03
Fapiao Liability
If a company fails to produce a Fapiao when requested by a customer, this constitutes an illegal act.
Getting rid of providing Fapiao equals to cheating on paying tax, this behavior leaves negative effect in applying for a work permit!
For individual consumers, Fapiao acts as proof of expenditure in cases when they need to reclaim business expenses. If a business owner is unable or unwilling to provide a Fapiao, customers have the right to report the company to the local tax bureau.
04
Reminder
'Xiao piao' is kind of a receipt in China, which is only used for an evidence of a purchase, you cannot use a 'Xiao piao' to get reimbursed!
Regulations on General Fapiao
From July 1st, 2017, when a seller issues general VAT Fapiao, the following details are needed to obey:
❶ Necessary information including buyer's company name, Uniform Social Credit Code or buyer’s tax code is needed to correctly write on a general VAT Fapiao.
❷ The contents of the Fapiao should be issued in accordance with the actual sales situation. It's not allowed to according the buyer's requirements to fill in the transaction, which actually does not match the content.
Why Fapiao Affects Residence Permit？
Fapiao reflects the tax-paid status of a company, if you consider hiring more foreign staff in the future, it is necessary to run the finance well. It gives more quotas in applying for work permits of a company!
As we know, after getting a work permit, then you can apply for working visa, and it needs to keep a good credit for years to gain a permanent residence!
WeChat's 'Fapiao Helper'
In reaction to the new requirements for fapiao issuance, you can input relevant corporate tax information, and present it to service providers to issue fapiao via WeChat.
Step 1
Follow SAT official WeChat account (WeChat ID: chinatax008)
Step 2
Click the mini program -- Tax invoice assistant(税务发票助手)
Step 3
Fill out the company information
*Note: you need to fill out the information in Chinese.
Step 4
Generate the QR code and issue a fapiao.
Once the relevant information is filled out, a QR code is generated and included on a ‘card’, which can be scanned by service providers to quickly and efficiently issue a fapiao with the correct information.
HACOS,Business Services Solutions Master