In order to promote agricultural development and reduce the burden on farmers, the Provisional Regulations on Value-added Tax stipulates that "self-produced agricultural products sold by agricultural producers" are exempt from value-added tax. Agricultural production enterprises can buy their own agricultural products from farmers, and can issue purchase invoices by themselves, and deduct the input tax according to 13% of the purchase price of agricultural products.
This regulation is implemented to maintain the integrity of the VAT deduction chain and belongs to the extension of the VAT system in the agricultural field.