China unites state and local VAT Golden Tax System
- Dec 13, 2019 | Richard Asquith
China has commenced consolidating its state and local VAT Golden Tax System (GTS). At present, taxpayers must taxes via the Golden System separately for the two tax regimes. It is part of a wider plan extend fiscal cooperation between national and local tax authorities to improve tax collections and administration. Currently, VAT charged on sales invoices is split between the two levels of government.
Currently, draft invoices, prepared by certified VAT software, are submitted by the taxpayer via locked GTS terminals made available to businesses by the government. The government can use this terminal connection to track and verify VAT calculations and subsequent reporting. Validated invoices must still be printed.
The reforms will combine the collection of tax information into one system, enabling the exchange of information, remittances, fraud cases and administration of taxpayers’ affairs. It should also reduce the compliance burden for the taxpayers who have to deal with the two different bodies.