China: Implementation of the Fully Digitalized e-Fapiao
What is the Fully Digitalized e-Fapiao?
The Fully Digitalized e-Fapiao is a completely new type of electronic invoice that is different from both the normal VAT e-Fapiao and the traditional paper Fapiao, but has the same legal standing. The following are some of the unique features of the Fully Digitalized e-Fapiao:
No medium is needed: Under the current pilot program, taxpayers can issue the Fully Digitalized e-Fapiao through the national e-Invoicing service platform without requiring special tax control mechanisms.
Fapiao number automatic assignment system: When the Fapiao information is generated, a unique Fapiao number will be automatically assigned by the e-Invoicing service platform.
Managing the total amount of Fapiao based on taxpayers’ credibility: The maximum amount of invoices issued by the taxpayer in a calendar month will be determined by the tax authorities. Adjustments will be made based on taxpayers’ risk level, credit rating, and other factors. The maximum invoice amount is the highest permissible total invoice value that can be issued by a pilot taxpayer within a calendar month, excluding VAT.
What is the Content of the Fully Digitalized e-Fapiao?
The 17 items of the Fully Digitalized e-Fapiao are:
- Dynamic QR code
- Invoice number
- Issuance date
- Buyer information
- Seller information
- Project name
- Specification and model
- Unit
- Quantity
- Unit price
- Amount
- Tax rate / levy rate
- Tax amount
- Total
- Ad valorem
- Tax total
- Remarks
Which formats are used for the Fully Digitalized e-Fapiao?
Fully Digitalized e-Fapiao does not need to be saved in a specific digital format; PDF, OFD, XML, and other formats can be used. The Fully Digitalized e-Fapiao can be delivered through the e-Invoicing service platform, email, QR code, or other means. In addition, a third party within the e-Fapiao service platform can be used to issue electronic invoices.
The following two methods are supported by pilot-scheme taxpayers, and tax-related professional service agencies:
- Online or offline channels can be used by tax-related professional service organizations for submitting the information on the trusted tax handling agreement signed by the taxpayer to the tax authorities. After the taxpayer is confirmed by the Electronic Taxation Bureau, the tax-related professional service organization can obtain the corresponding tax authorization, the system automatically records the relationship.
- Online or offline channels can be used by pilot-scheme taxpayers to submit tax returns and information on the trusted tax handling agreement signed with tax-related professional service institutions or relevant personnel to the tax authorities. Then, tax-related professional service organizations can receive corresponding authorization after the Electronic Taxation Bureau confirms. The system automatically records the relationship.
What is the implementation timeline?
The pilot program for the Fully Digitalized e-Fapiao started on December 1, 2021. Initially, selected taxpayers in Shanghai, Guangdong, and Inner Mongolia started to accept and issue the Fully Digitalized e-Fapiao. Because of its advantages, the new system has gained popularity among taxpayers. The pilot program was expanded in 2022 and 2023 to cover a broader range of taxpayers. Since November 1, 2023, it has been extended to all regions of China, except Tibet.
How can SNI help you?
SNI offers an add-on solution that allows data retrieval from taxpayers’ systems, data mapping, processing, and communication with tax authorities, all performed under a single solution. In China, SNI can contact one of the third-party companies that can submit invoice files to the e-Fapiao service platform.
