The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") have recently issued the Announcement on Clarifying the Super-deduction Value-added Tax Policy for the Life Service Sector (the "Announcement").

The Announcement reads that, from October 1, 2019 till December 31, 2021, a taxpayer in the life service sector will be allowed to deduct from its payable tax the deductible amount of input value-added tax (VAT) for the current period, plus an extra 15% deduction. The Announcement further states that a taxpayer in the life service sector refers to the taxpayer whose sales amount derived from the provision of life services accounts for over 50% of its total sales amount. For a taxpayer established before September 30, 2019, the abovesaid 15% super-deduction VAT policy will apply from October 1, 2019, if its sales amount during the period between October 2018 and September 2019 (or the sales amount earned during the actual business period, if its business period is shorter than 12 months) satisfies the abovesaid requirement. As for a taxpayer that is established after October 1, 2019, the 15% super-deduction VAT policy will apply from the date when it is registered as a general taxpayer, if its sales amount achieved in three months from the date of establishment satisfies the abovesaid requirement.

(Source: Ministry of Finance)