In the production workshop of Xingtai Baixiang County Huaxing Paper Industry Co., Ltd., waste cartons and waste paper are crushed, screened, pulped and processed through multiple procedures, and then transformed into high-quality recycled paper pulp, which is continuously sent to the next production line.

    Xingtai Baixiang County Huaxing Paper Industry Co., Ltd. Accountant Wang Shanshan

    Since the beginning of this year, we have issued 2,038 "reverse invoices" to sellers of waste materials, involving an amount of RMB 201 million. With compliant deduction vouchers, enterprises have significantly reduced procurement costs, and capital turnover efficiency has also been markedly improved.

    Resource recycling is a key link in promoting the replacement of old equipment and products with new ones, but for a long time, upstream natural persons selling waste materials have often adopted the method of "selling without invoices," which not only prevents enterprises from deducting input VAT, but also makes it difficult to obtain compliant invoices for pre-tax deduction of enterprise income tax, leaving them exposed for a long time to industry pain points such as irregular financial accounting and relatively high tax risks. To solve this problem, since April last year, the state has introduced the policy of "reverse invoicing" for natural persons selling to resource recycling enterprises, helping the resource recycling industry break through bottlenecks.

    Different from the conventional model in which the seller (payee) issues an invoice to the buyer (payer), "reverse invoicing" means that a resource recycling enterprise as the buyer (payer) issues an invoice to the natural person seller of the seller (payee).

    Chief of the Goods and Services Tax Section, Xingtai City Taxation Bureau, State Taxation Administration Liu Dingxi

    Enterprises actually engaged in resource recycling business only need to submit relevant materials to the tax authority and go through the corresponding procedures to issue invoices through the Electronic Tax Bureau or the 51 Invoice platform. At the same time, natural person sellers can apply for the small-scale taxpayer VAT exemption policy, achieving mutual benefits for both enterprises and individuals.      

    This innovative measure has driven resource recycling enterprises to shift from "passively waiting for invoices" to "actively issuing invoices," providing a solid institutional guarantee for further standardizing corporate financial accounting and reducing tax risks. Up to now, 88 resource recycling enterprises in Xingtai City have successfully handled the "reverse invoicing" business, cumulatively issuing nearly 50,000 invoices to more than 4,606 natural persons.

    According to statistics, Xingtai City has a total of 124 resource recycling enterprises. Since the state launched the "reverse invoicing" policy for resource recycling enterprises, the Xingtai municipal tax system has proactively moved forward with services, formed a dedicated guidance team, and provided enterprises with policy explanation, qualification review, invoicing guidance, and full-process closed-loop services for materials retention, promptly responding to and resolving 26 difficult issues, effectively helping resource recycling enterprises achieve "lightweight and fast running."

    Chief of the Goods and Services Tax Section, Xingtai City Taxation Bureau, State Taxation Administration Liu Dingxi

    Next, the Xingtai City Taxation Bureau will continue to improve the tax risk monitoring and early warning mechanism for "reverse invoicing," track and analyze enterprises' policy implementation, rely on tax data for research and judgment on invoicing trends, accurately solve enterprise bottlenecks and difficulties, and help the resource recycling industry chain develop in a standardized and healthy way.