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Former Member
Feb 08, 2012 at 09:42 PM

Shanghai VAT - Branch specific financial reporting

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Hi Experts,

We are working on an shanghai VAT pilot project, We have an company code for China Company under which there are several branches with the new Legal VAT law triggers the need for separate financial statement reporting.The project team has interpreted this as needing separate company codes for branches within China. As this is a very significant effort, both for business and the systems,because the branch is in Shanghai and since parent company is not.

1. As a General VAT Payer, Branch is required to set up accounting books and provide clear statements for income, expense and cost etc.

2. Clearly reconciliation between revenue, output vat and also output vat invoice,cost ,input vat and deductable invoice or even can track back to specific order and contract .

I am researching if you are familiar with other countries with branches and separate reporting to determine if there is a solution that can be leveraged.

SHANGHAI VAT PILOT PROGRAM :-

From 1 January 2012 qualified businesses in Shanghai will be required to charge VAT following approval by the local tax bureau;

Input VAT is creditable both for qualified pilot participants and their customers;

Generally, the program follows existing VAT mechanisms;

Two new VAT rates will be introduced, 6% and 11%, adding to the existing rates of 13% and 17%;

Treatment of exports is yet to be determined but likely 0% or tax exempt;

Thank you for looking into this !!

Amy