On and after 1 Apr., 2019, Input tax of service fees for domestic passenger transportation are allowed to be deducted when reimbursing as the normal company expense for VAT general taxpayers, the specific computations are:

a. For an Electronic Ordinary VAT invoice, the input tax listed on the invoice can be deducted.

b. For an air transport electronic ticket itinerary sheet with passenger identity information, the tax deducted shall be calculated according to the following formula:

Tax deducted= (Ticket Price + Fuel Surcharge) / (1+9%) *9%

c. For railway tickets with passenger identity information, the tax deducted shall be calculated as below:

tax deducted= par value / (1+9%) *9%

d. For other passenger tickets such as highways and waterways with passenger identity information, tax deducted shall be casted as below:

tax deducted = par value / (1+3%) *3%

Kindly remind:

a. Input tax of services fees for international passenger transportation cannot be deducted as they are applied to Zero VAT tax rate or tax exemption policy.

b. Only passenger tickets with passenger identity information can be used as the voucher of input tax deduction.

c. No tax deduction is allowed for Items calculated by Deduction rate, VAT exemption, collective welfare or personal consumption. 
 
 

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