Two sectors: VAT deduction for small-scale taxpayers in 2023

On January 9, the Ministry of Finance and the State Administration of Taxation issued the Announcement on Clarifying Policies for VAT Reduction and Reduction for Small-scale VAT Taxpayers, clarifying that from January 1, 2023 to December 31, 2023, small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (including the principal amount) will be exempted from VAT
.

The announcement points out that from January 1, 2023 to December 31, 2023, small-scale VAT taxpayers will be subject to a taxable sales income at a rate of 3%, minus a rate of 1% to collect VAT; For items subject to a 3% pre-levy rate, the prepayment VAT at a pre-levy rate of 1
% will be reduced.

According to the announcement, from January 1, 2023 to December 31, 2023, taxpayers in the productive services industry are allowed to deduct the tax payable by 5% on the input tax deductible in the current period
.
Taxpayers in the productive service industry refer to taxpayers whose sales from the provision of postal services, telecommunications services, modern services and daily life services account for more than 50% of all sales
.
At the same time, taxpayers in the life service industry are allowed to deduct 10% of the deductible input tax in the current period to offset the tax payable
.
Taxpayers in the life service industry refer to taxpayers whose sales from the provision of life services account for more than 50% of all sales
.

The announcement also clarifies that according to the provisions of the announcement, the value-added tax that should be reduced and deducted before the issuance of the announcement can be deducted or refunded
if it has been collected before the issuance of the announcement.