Officials at Nanjing's Qixia District Tax Bureau noticed that some companies were deducting the full input tax on shared costs such as office rent and utilities without transferring out the portion belonging to simplified-taxation projects. The problem appears across many industries and is usually caused by unclear policy understanding and loose accounting rather than intent. In January the bureau built a risk-identification model on tax big data, combining invoices, filings, project registrations, input selections and sales structures with eight warning indicators, such as a high simplified-sales share paired with a low transfer-out ratio, or full deduction of shared expenses, so the system scans automatically and pinpoints suspect cases. Results so far: nine companies have corrected their filings, RMB 8.36 million of ineligible input credits were removed and RMB 1.52 million in refunds recovered; the model scanned 1,321 companies and flagged 56.
News Detail
Nanjing Qixia: Data-Driven Two-Way Verification Tightens VAT Input Credit Management
The Qixia District Tax Bureau in Nanjing has rolled out a data-driven two-way verification method to address confusion between general and simplified VAT calculation items and input tax that should have been transferred out. In January it built a risk-identification model on tax big data, analysing VAT invoices, filings, project registrations, input selections and sales structures, with eight warning indicators covering simplified-sales ratios, input-credit scale, transfer-out ratios and refund linkage, enabling automatic scanning and precise targeting. So far nine companies have corrected filings, removing RMB 8.37 million of ineligible input credits and recovering RMB 1.52 million in refunds; the model scanned 1,321 local companies and flagged 56 suspect ones.
2026-09-28