Where the expenses incurred by an enterprise within the territory of China belong to VAT taxable items (hereinafter referred to as "taxable items"), the other party is a VAT taxpayer who has gone through tax registration, and its expenses are pre-tax deduction vouchers with invoices (including invoices issued by tax authorities according to regulations);
The other party is a unit that does not need to apply for tax registration according to law or an individual engaged in small-scale sporadic business, and its expenses are deducted before tax with invoices or receipts and internal vouchers issued by the tax authorities. The receipt shall include the name of the payee, personal name and ID number, expenditure items, the amount received and other relevant information. Where there are other provisions on the issuance of invoices for taxable items in State Taxation Administration of The People's Republic of China, the prescribed invoices or bills shall be used as pre-tax deduction vouchers.
If the expenses incurred by an enterprise in China are not taxable items, if the other party is the unit, other external vouchers other than the invoices issued by the other party shall be used as pre-tax deduction vouchers; If the other party is an individual, the internal voucher shall be used as the pre-tax deduction voucher.
Although the expenses incurred by enterprises in China are not taxable items, according to the regulations of State Taxation Administration of The People's Republic of China, invoices can be issued as pre-tax deduction vouchers.
The expenses incurred by an enterprise in purchasing goods or services from abroad shall be deducted before tax on the basis of the invoice issued by the other party or the receipt voucher with invoice nature and relevant tax payment vouchers.
Where an enterprise and other domestic enterprises (including affiliated enterprises) and individuals accept taxable value-added tax services (hereinafter referred to as taxable services), they shall share the expenses according to the principle of independent transaction. Enterprises use invoices and split sheets as pre-tax deduction vouchers, and other enterprises that receive taxable services use split sheets issued by their own enterprises as pre-tax deduction vouchers.
Where an enterprise shares the expenses incurred in accepting non-taxable services with other domestic enterprises and individuals, the enterprise shall use other external vouchers and split sheets other than invoices as pre-tax deduction vouchers, and other enterprises shall accept non-taxable services with split sheets issued by enterprises as pre-tax deduction vouchers.
For example, the lessor issues invoices as taxable items for water, electricity, gas, air conditioning, heating, communication lines, cable TV, Internet and other expenses. For the expenses incurred by the enterprise in renting (including the enterprise as a single lessee) the office and production site, the enterprise will take the invoice as the pre-tax deduction voucher; If the lessor adopts apportionment, the enterprise shall take other external vouchers issued by the lessor as pre-tax deduction vouchers.