Tax Issues: The Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China on Several Policies and Provisions on Value-added Tax and Business Tax stipulates that "value-added tax will not be levied on purchased goods that meet the following conditions at the same time, regardless of the accounting system. (a) The trustee does not advance the funds; (2) The seller will issue the invoice to the entrusting party, and the entrusted party will forward the invoice to the entrusting party; (3) The consignee shall settle the payment with the consignor according to the sales amount and the value-added tax actually charged by the seller (the value-added tax shall be charged by the customs for the goods imported on behalf of the consignor) and collect the handling fee. If your company's purchasing behavior meets the above three conditions at the same time, you should pay 5% business tax to the service organization. If the above three conditions cannot be met at the same time, the value-added tax on goods sales will be paid.

Accounting treatment:

(1) handle the sold goods (your company needs to issue another invoice to the entrusted purchasing unit instead of forwarding the seller's invoice).

Purchase and purchase goods, obtain special invoices for value-added tax, and accept and put them in storage to pay for the goods.

Borrow: inventory goods

Taxes payable-VAT payable (input tax) (proof required)

Loans: bank deposits

Sell goods, issue special invoices and collect payment for goods.

Debit: bank deposit

Loan: other business income-material sales

Taxes payable-VAT payable (output tax)

2\ The price difference shall be treated by paying business tax according to the fee for obtaining formalities.

receive the payment for goods

Debit: bank deposit

Loan: accounts received in advance-entrusting unit (including handling fee)

Receipt of purchase money, payment of payment income, confirmed by collection.

Debit: accounts received in advance

Loans: bank deposits

Other business income-procurement expenses

Issue business tax invoices for labor agencies to local tax authorities, and pay business tax and surcharges.

Debit: Other business expenses.

Loan: taxes payable-business tax payable

Taxes payable-urban maintenance and construction tax payable

Other payables-additional expenses payable for education

Tax payment: tax payable-business tax payable.

Taxes payable-urban maintenance and construction tax payable

Other payables-additional expenses payable for education

Loans: bank deposits