Retailing, Franchising, and Consumerism Business Intelligence in China

Chinese Electronics Retailers Under SAT Investigation

China's State Administration of Taxation is investigating the stub invoices of value-added tax paid by the three major home appliance retailers Gome, Suning and Dazhong, which are suspected of reporting decreased revenue to evade taxes.

SAT says it checked a total of 461 retail outlets of the three companies and is reviewing their stub invoices between January 1, 2006 and November 30, 2007.

SAT reportedly issued a circular on checking the stub invoices of the VAT paid by large home appliance retailers in March this year, but it immediately removed the circular for the message was believed to be too sensitive. SAT said it had realized there were a great deal of stub invoices of VAT among the companies and these invoices involved a large amount of funds.

Companies involved are said to be Xingtai Santai Industrial Co., Ltd; Gome Home Appliance Mall; Hebei Gome Electrical Company; Xingtai Xinhuiyuan Shopping Mall; Beijng Dazhong Electrical Appliance Company, Xingtai Branch; and Hebei Suning Electrical Appliance Chain Company, Xingtai Branch.

According to relevant rules, such large retail companies like Gome and Suning should pay VAT at a 17% rate.

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