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The State Administrative
of Foreign Exchange (SAFE) has recently announced the "Regulation of managing
the auto verification on payment of imported goods upon arrival", (The Regulation).
Starting from 01 September 2004, auto verification applies on the payment of imported
goods, of which payment should be made upon goods arrival. The Regulation also
simplify the documents verification procedures as follows: 1.
Auto verification on payment of imported goods upon arrival.
When an importer
present the import declaration documents to bank for payment of imported goods,
he/she simultaneously completes the procedure of declaration to payment of imported
goods, declaration at SAFE in person is no longer required. SAFE can control the
verification through communicating with bank to implement more effective supervision. 2.
Simplifying the document verification procedure for the captioned payment.
Importers
are not required to submit relevant documents such as invoices, import license
etc when making payment of imported goods, since such goods are inspected by customs
when entering China.
3.
Difference in tax deduction
Ordinary Taxpayers can deduct the amount of tax
on purchases with the tax invoices, but Small Taxpayers are not permitted to claim
deduction.
4.
Difference in calculating of tax
The basic calculation for tax payable of
Ordinary Taxpayers is Output tax collected during the period - input tax paid
during the period. On the other hand, a simplified method is used for the calculation
of VAT payable by Small Taxpayers which is sales volume x rate of levy.
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