What is VAT?
Value-added tax is a turnover tax based on the value-added amount of goods (including taxable services) generated in the circulation process. Value-added tax is a tax levied on the value-added of units and individuals who sell goods or provide processing, repair and replacement services and import goods. Value-added tax has become one of the most important taxes in China, and it is the tax with the largest income.
Function of special VAT invoice
1. The special VAT invoice not only has the function of commercial voucher, but also has the function of tax payment voucher, which is not only the legal voucher of the seller's tax obligation, but also the legal voucher of the buyer's input tax, because the tax deduction is implemented on the basis of the invoice.
2. Special VAT invoice can link all links of a kind of goods from initial production to final consumption. According to the tax amount indicated on the special invoice, the tax is collected and deducted step by step, and the tax is passed from one business link to the next until the goods or services are provided to the final consumers. Therefore, the sum of the tax payable indicated on the special invoices issued by each link is the overall tax burden of the goods or services, which embodies the characteristics of universal collection of value-added tax and fair tax burden.
Special invoices for value-added tax are like a chain, which connects taxpayers in all links, thus forming the restriction mechanism of value-added tax itself, that is, the mechanism of cross-examination between buyers and sellers who use invoices. This special function of special VAT invoice makes many countries that implement VAT call this kind of invoice "tax invoice", which is managed as strictly as banknotes and checks.