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SAT Clarifies the Issues Relating to VAT of Selling the Self-used Fixed Assets by General Taxpayers

Recently, the State Administration of Taxation ("SAT") has issued the "Announcement of the State Administration of Taxation on Issues Relating to Value-Added Tax of Selling the Self-used Fixed Assets by General Taxpayers" (the "Announcement"), which is set to come into force on February 1, 2012.

The Announcement clarifies that, if selling its used fixed assets by any VAT general taxpayer falls into the following two circumstances, its VAT may be reduced by half by the tax rate of 4% according to the simplified method:

1. The taxpayer is a small-scale taxpayer when purchasing or homemaking fixed assets and sell such fixed assets after the taxpayer is identified as the general taxpayer.

2. The VAT general taxpayer makes activities on which VAT shall be levied according to the simplified method, and sells fixed assets where no input tax shall be deducted and is deducted.


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