Article 25 The following input VAT shall be allowed to be deducted from the output VAT:
(1) the VAT amount indicated on the special VAT invoice (uniform invoice for the sale of tax-controlled motor vehicles, the same below) obtained from the seller or the provider.
(2) The amount of VAT indicated on the special payment certificate for import VAT obtained from the Customs.
(3) For the purchase of agricultural products, in addition to obtaining special VAT invoices or special customs payment certificates for import VAT, the input VAT shall be calculated according to the purchase price of agricultural products indicated on the purchase invoice or sales invoice of agricultural products and the deduction rate of 13%. The calculation formula is: input tax = purchase price × deduction rate.
The purchase price refers to the price indicated on the purchase invoice or sales invoice of agricultural products purchased by taxpayers and the tobacco tax paid in accordance with regulations.
For the purchase of agricultural products, the input tax shall be deducted in accordance with the "Pilot Implementation Measures for the Verification and Deduction of Input VAT on Agricultural Products".
(4) The amount of VAT indicated on the tax payment certificate for the tax payment of the tax obtained from the tax authority or withholding agent for the purchase of services, intangible assets or immovable property from overseas entities or individuals.
Article 26 Where the VAT deduction voucher obtained by a taxpayer does not comply with the relevant provisions of laws, administrative regulations or the State Administration of Taxation, the input tax shall not be deducted from the output tax.
VAT deduction vouchers refer to special VAT invoices, special customs import VAT payment certificates, agricultural product purchase invoices, agricultural product sales invoices and tax payment vouchers.
If a taxpayer deducts input tax with a tax payment certificate, it shall have a written contract, proof of payment and a statement or invoice from the overseas unit. If the information is incomplete, the input tax shall not be deducted from the output tax.
Article 27 The input VAT of the following items shall not be deducted from the output VAT:
(1) purchased goods, processing, repair and repair services, services, intangible assets and immovable property used for taxable items under the simplified tax calculation method, value-added tax exemption items, collective welfare or personal consumption. The fixed assets, intangible assets and immovable properties involved in them only refer to the fixed assets, intangible assets (excluding other equity intangible assets) and immovable properties that are dedicated to the above-mentioned items.
The taxpayer's social and entertainment consumption is personal consumption.
(2) Purchased goods with abnormal losses, as well as related processing, repair, and repair services or transportation services.
(3) Purchased goods (excluding fixed assets), processing, repair and repair services, or transportation services consumed in products and finished products for abnormal losses.
(iv) Immovable property for abnormal loss and the purchase of goods, design services and construction services consumed by the immovable property.
(v) Purchased goods, design services and construction services used in the construction of immovable property for abnormal losses.
Taxpayers' new construction, reconstruction, expansion, repair and decoration of immovable property are all immovable property projects under construction.
(6) Purchased passenger transportation services, loan services, catering services, daily services for residents and entertainment services.
(7) Other circumstances stipulated by the Ministry of Finance and the State Administration of Taxation.
The goods referred to in subparagraphs (4) and (5) of this article refer to the materials and equipment that constitute the real estate entity, including building decoration materials and water supply and drainage, heating, sanitation, ventilation, lighting, communications, gas, fire protection, central air conditioning, elevators, electrical, intelligent building equipment and supporting facilities.
Additional Information:
On March 24, 2016, the Ministry of Finance and the State Administration of Taxation announced the Implementation Measures for the Pilot Program of Replacing Business Tax with Value-Added Tax. With the approval of the State Council, starting from May 1, 2016, the pilot project of replacing business tax with value-added tax will be launched nationwide, and all business tax taxpayers in the construction industry, real estate industry, financial industry, and life service industry will be included in the scope of the pilot project, and the payment of business tax will be changed to the payment of value-added tax.
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