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SAT Clarifies VAT Issues Concerning Overdue Tax Payment Vouchers

By Dezan Shira & Associates
Posted: 17th January 2012 09:42

On December 29, the State Administration of Taxation (SAT) issued the “Announcement on Issues Concerning the Offset of Value-added Tax (VAT) using Overdue Tax Payment Vouchers (SAT Circular [2011] No. 78)” (the “Announcement”) to resolve the issue of the inability of general VAT payers to declare input VAT on time due to the occurrence of various objective circumstances.

According to the Announcement, taxpayers who are overdue in applying for the tax offset are permitted to apply to offset input VAT after examination and approval of tax authorities if actual transactions occurred and stipulated objective circumstances are met, and:

  • The VAT payment vouchers obtained by general VAT taxpayers have been certified or collected for information reporting; or
  • The VAT payment vouchers obtained are consistent with verification results or general VAT taxpayers within the tax mentoring period, or those under the purview of the customs special import VAT payment letter “verification before offset” administrative measure.

The VAT payment vouchers as referred to in the Announcement include VAT special invoices (including cargo transport VAT special invoices), customs special import VAT payment letters, and uniform invoices of the road and inland cargo transportation industry.

The object circumstances stipulated in the Announcement are:

1) The occurrence of natural disasters, social emergencies and other force majeure events;

2) Seizing or sequestrating of the taxpayer’s accounting books and materials by judicial or administrative agencies in the process of conducting business or inspection;

3) Malfunction of the tax agency’s information system or network, resulting in the inability of the taxpayer to obtain the certification or verification results notification on time;

4) The tax personnel of the enterprise suffer injury, death, sudden severe illness, or leave his/her post without notice or permission, without conducting handover of his/her work;

5) Other circumstances stipulated by the SAT.

The Circular is effective from January 1, 2012. Any overdue VAT payment vouchers obtained by VAT general taxpayers that are issued after January 1, 2007 and took place before the effective date of the Announcement can be used to apply for offsetting of VAT prior to June 30, 2012 in accordance with this Announcement.


Dezan Shira & Associates is a specialized foreign direct investment practice, providing business and legal advisory, tax, accounting, payroll and due diligence service to multinationals investing in the emerging markets of Asia. Established in 1992, the firm is a leading regional practice in Asia with twenty offices in five jurisdictions, employing over 170 business advisory and tax professionals. For information or advice on establishing business operations in China, please contact Dezan Shira & Associates at or visit

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