VAT exemption items
According to the relevant provisions of the Provisional Regulations on Value-added Tax in People's Republic of China (PRC), the following items are exempt from value-added tax:
1, self-produced agricultural products sold by agricultural producers.
Agriculture: planting, breeding, forestry, animal husbandry and aquaculture.
2. Contraceptive drugs and appliances.
3. Old books: old books and old books bought from the society.
4 imported instruments and equipment directly used for scientific research, scientific experiments and teaching.
5. Imported materials and equipment provided free of charge by foreign governments and international organizations.
6. Special articles for the disabled are directly imported by disabled organizations.
7. sell your used items.
What does VAT tax-free income mean?
Value-added tax-free income is income that enjoys tax preferences and does not pay value-added tax. More common is the sales income of self-produced agricultural products and some vegetables, meat and eggs in circulation.
Accounting entries for vat reduction and exemption
Debit: bank deposits, accounts receivable, etc.
Loan: main business income (excluding tax income)
Taxes payable-VAT payable
When vat is reduced or exempted:
Borrow: Taxes payable-VAT payable
Loan: non-operating income
What is VAT?
Value-added tax refers to the extra-price tax paid by units and individuals who sell goods or provide processing, repair and replacement services, sales services, intangible assets or real estate, and imported goods in China.
The Provisional Regulations of People's Republic of China (PRC) on Value-added Tax divides taxpayers into general taxpayers and small-scale taxpayers according to their business scale and sound accounting.
There are three main tax methods for VAT: tax base enumeration method, tax base deduction method and purchase tax deduction method. At present, the purchase tax deduction method is widely used in various countries, that is, enterprises collect input tax when purchasing goods and output tax when selling goods, and the difference between them is the value-added tax payable.
The tax period of value-added tax is monthly or quarterly respectively.