Country and tax compliance updates | issue 2 – Asia
Developments in China, Japan and India, while the Philippines, Thailand...
Bahrain is now officially on Tungsten’s compliant country list. Please visit this link to access the list of basic food items that are not subject to VAT at 5%. A penalty of BD10,000 and/or imprisonment will be imposed for:
- Failure to register for VAT within 60 days of the registration deadline. This registration due date is determined by type of business, based on the value of supply. Article 29 provides an overview of the persons required to be registered for VAT purposes;
- Failure to issue a VAT invoice within 15 days of the month following the taxable supply; and
- Failure to submit a VAT return and/or pay any VAT due by the end of the month following the reporting month.
Special VAT Invoices in China still need to be accompanied by a paper “Fapiao” invoice –. In practice, the majority of B2B invoices use the special tax, so a fully electronic solution is not yet possible at the time of writing. We are aware that some providers are attempted to provide scanning solutions or capture QR codes with limited success to date.
Furthermore, we are aware that some buyers require more detailed information than is contained on the government-mandating paper fapiao. Therefore, suppliers are being forced to input invoice data into buyer-specific portals on top of the fapiao they are required to produce for the government, which is creating process difficulties for them.
Tungsten is planning to launch a service in China that will allow suppliers to submit invoice data to Tungsten through either our portal or direct integration – they will then no longer need to use multiple, customer-specific invoicing portals.
The Indian Government is proposing to introduce a “real-time” GST e-invoicing system for B2B transactions, effective January 2020. It is our understanding that a unique number issued by the government is required on GST invoices. This means that businesses or their e-invoicing providers must be linked to the government portal where the unique number can be obtained. In addition to that, a Quick Response (QR) Code is required on the Tax Invoice and on the Bill of Supply (for goods exempt from GST). The effective date and exact requirements are still to be confirmed. India has just closed off a public consultation asking market parties for feedback on a standardised XML invoice format.
The GST Council has extended the due date from the annual return and reconciliation statement need to be supplied, and extended the tenure of the National Anti-Profiteering Authority (NAA) by two years. The annual return in FORM GSTR-9/9A and the audit report/ reconciliation statement in FORM GSTR-9C for financial year (FY) 2017-2018 had been extended until 31 August 2019.
Furthermore the time limit for taxpayers to file an application in FORM GST CMP-02 to opt for the composition scheme had been extended until 1 July 2019. It is highly recommended that businesses operating in India seek clarification with their local tax agents on their annual return.
The Japanese government is considering how to tighten legislation around B2B invoicing requirements and impose additional tax rates and domestic reverse charging. Currently there is no mandate, but the government is seriously looking at ways to reduce tax leakage in the country, starting with mandatory tax payer registration in the next year.
The government is still yet to release requirements for the impending e-invoicing mandate in 2020. It is currently considering a model that combines mandatory clearance for high-risk tax payers and real-time reporting for the others.
It appears that the Thai government want to extend their eTax requirements to e-invoicing by 2022, but no details have been published thus far. The Philippine government is making similar noises to Thailand and is also aiming for implementation in 2022, but again, no details have been published.
Please refer to our June update for more information on legislation in Singapore and Taiwan.
Have you got questions on Compliance or Tungsten’s Roadmap? Get in contact with our Country and Tax Compliance team at [email protected]