Enterprise Business “A” is a VAT payer, its headquarters are located in Luohu District, Shenzhen, and for the sake of business needs, in Futian District, established an independent branch office in name as foreign operations. Should the company's branch have to pay VAT ? Can it be aggregated into the headquarter to pay ?
Under the “Provisional Regulations of the People's Republic of China on Value-Added Tax”, Article 22:-
- A fixed establishment shall go to their place of its location, the relevant tax authorities to declare taxes. Head office and branch not in the same county (city) should be subject to their respective local relevant tax authorities to declare taxes; finances department of the State Council, the tax authorities or its authorized financial, tax authorities, can be summarized and to the head office of the relevant tax authorities.
- A fixed establishment, in another county (city), selling goods or taxable services, shall in their place of location, go to the relevant tax authorities for opening an outbound business activities tax administration with proof, to declare taxes. Not attestation shall report to the sale or other service takes by the relevant tax authorities to declare taxes; failing to declare tax for sale or service, the relevant tax authorities shall collect the overdue taxes.
- Non-fixed selling goods or taxable services shall occur to the sale or service to the relevant tax authorities for Carolina Tax; it did not occur to the sale or service from the relevant tax authorities to declare taxes, and to its institutions located or domiciled tax authorities for underpaid taxes.
According to "Ministry of Finance, State Administration of Taxation on VAT Tax Sites Chain Operator Issues Notice" ( Cai Shui Zi  No. 97 ) it provides for cross-regional business direct chain, whose chain of stores are owned by the headquarters or holding open, unified management at headquarters under the leadership of the chain, where according to the Ministry of domestic Trade, " Standard Opinion chain management " requirements, is taking computer networking, a unified procurement and distribution products, unified accounting, unified standardized management and operation, and in accordance with the following conditions, may be implemented by the head office and branch head office to the local tax authorities unified declare and pay VAT : the municipalities within the chain of business enterprises, reports to the State Administration of Taxation jointly with municipalities, the Municipal Finance Bureau for examination and approval .
Therefore, a company's branch offices shall declare to the local relevant tax authorities and pay VAT. For qualifying total branches, it must report by the Shenzhen Municipal Bureau of Finance State Administration of Taxation with jointly approval consent before the head office summarize VAT.