Invoices. However, no input tax credit is allowed.

Policy basis: Ministry of Finance

State Administration of Taxation

Notice on Comprehensively Launching the Pilot Program of Changing Business Tax to Value-added Tax (Cai Shui [2016] No. 36): Annex 1 Implementation Measures for the Pilot Program of Changing Business Tax to Value-added Tax:

Article 27

Input tax of the following items shall not be deducted from output tax:< /p>

(1) Purchased goods, processing, repair and fitting services, services, intangible assets and immovable properties used for taxable items under the simplified tax calculation method, VAT-exempted items, collective welfare or personal consumption. The fixed assets, intangible assets and immovable properties involved only refer to the fixed assets, intangible assets (excluding other equity intangible assets) and immovable properties used exclusively for the above projects.

The taxpayer's consumption for socializing is personal consumption.

(2) Unusual loss of purchased goods, as well as related processing, repairing, and mending labor services and transportation services.

(c) Purchased goods (excluding fixed assets), processing, repair and fitting-out labor and transportation services consumed in products in process and finished goods that are not normal losses.

(d) Unusual loss of real estate, as well as purchased goods, design services and construction services consumed by the real estate.

(v) Purchased goods, design services and construction services consumed in the construction in progress of the immovable property which is not a normal loss.

Taxpayers' new construction, remodeling, expansion, repair and decoration of real estate are all real estate construction in progress.

(vi) Purchased passenger transportation services, loan services, catering services, residents' daily services and entertainment services.

(vii) Other cases stipulated by the Ministry of Finance and the State Administration of Taxation.