Q: I am a service company, please ask the recently introduced additional credit policy, productive service industry taxpayers, refers to the provision of postal services, telecommunication services, modern services, living services to obtain sales accounted for more than 50% of the total sales of taxpayers. Taxpayers in the living service industry refer to those taxpayers whose sales made by providing living services account for more than 50% of all sales. What is the definition of living services in these two policies? How should I choose to apply different additive credit policies?

A: The definition of living services in the two policies is the same. Article 7 of the Announcement of the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs on Relevant Policies on Deepening Value-added Tax Reform (No. 39 of 2019) stipulates that the specific scope of living services is in accordance with the Notes on Sales of Services, Intangible Assets, and Real Estate (issued by Caixin [2016] No. 36). The Notes on Sales Services, Intangible Assets, and Real Estate provide that life services refer to all types of service activities provided to meet the daily life needs of urban and rural residents. It includes cultural and sports services, education and medical services, tourism and entertainment services, catering and accommodation services, residents' daily services and other living services. After the taxpayer determines the application of the additive credit policy, no further adjustment will be made within the current year, and the applicability of the policy in subsequent years will be determined based on the calculation of the previous year's sales.

If the proportion of sales made by your company in the previous year in the provision of daily life services to all sales has exceeded 50%, you can apply the additive credit policy with a 10% additive credit ratio; if the proportion of sales made by your company in the previous year in the provision of daily life services to all sales has not exceeded 50% but the total proportion of sales made by your company in the provision of the four services, namely, postal services, telecommunication services, modern services, and daily life services, has not exceeded 50%. If your company's sales of postal services, telecommunication services, modern services, and living services do not exceed 50% of all sales, but the total sales of the four services accounted for more than 50% of all sales, then you can apply the 5% bonus and credit policy as stipulated.