Recently, our ministry, administration of taxation and the general administration of customs issued the announcement on deepening the reform of the VAT related policy (the general administration of customs of the taxation administration of the ministry of finance announced in 2019, 39, hereinafter referred to as "39 notice"), the provisions of the "since April 1, 2019 to December 31, 2021, allow production and consumer services taxpayer according to the current input tax deductible basis at 10%, offset the tax payable". The relevant issues concerning the application of the provisions on VAT accounting treatment (finance and accounting [2016] no. 22) are interpreted as follows:

Taxpayers of production and living service industries shall, when acquiring assets or receiving labor services, conduct accounting treatment of VAT related businesses in accordance with the relevant provisions of the provisions on the accounting treatment of VAT; When VAT is actually paid, "tax payable -- VAT not paid" is debited according to the tax payable, "bank deposit" is credited according to the actual tax paid amount, and "other income" is credited according to the amount deducted.

                                Accounting division, ministry of finance

                                                  On April 19, 2019