A4 paper (HS code 4802560090) has a 0% VAT rebate rate, meaning no rebate benefits can be claimed upon export. In export business, if a product has a rebate rate, exporters need to issue VAT invoices to claim rebates; if the rebate rate is 0%, theoretically it might seem unnecessary to issue invoices. However, the reality isnt that simple. Tax compliance involves not just rebates but also enterprise accounting integrity and customs record consistency.

Special circumstances

For example, suppose a company is originally a plastic products manufacturer, not a paper products producer, but is requested by a long-term client to purchase and export A4 paper. This raises several key issues:

1. Business scope mismatch: The companys customs-registered business scope mainly covers plastic products. Exporting A4 paper might be seen as exceeding the registered scope, increasing tax audit risks.
2. Input-output matching: If you purchase A4 paper from manufacturers without invoices for direct export, this creates export output (sales records) without corresponding input (purchase invoices). Tax authorities during audits may require supplementary input invoices or even demand back taxes.
3. Client demands and profit considerations: The customer wants to purchase at low prices and in large quantities. If acting solely as a purchasing agent without adding profit, the company may face tax risks without gaining any income.

Pros and cons analysis of issuing invoices

Export without issuing invoices

• Advantages: Simple process, seemingly reduces costs (manufacturer quotes 50 RMB/box tax-exclusive).
• Changes in payment methods:
  • Tax authorities may consider the lack of input tax against output tax and require tax supplements or impose fines.
  • Customs inspection may question the business scope, affecting clearance.
  • A4 paper is a zero-tax-rate product, and recent regulatory scrutiny has intensified. Operating without issuing invoices may attract special attention.

Export with issuing invoices

• Advantages:
  • Matching input and output invoices ensures clear accounting and compliance with tax requirements.
  • Reduces the risk of audit and tax supplements, ensuring corporate compliance.
• Disadvantages: Costs may be slightly higher (requiring manufacturers to issue invoices and pay tax points), limiting profit margins.

Better solution

Given that we are not A4 paper manufacturers and have no intention of profiting from this, the safest approach is:

1. Directly introduce the customer to the manufacturer for transactions: Act as an intermediary by recommending the customer to the paper mill, meeting customer needs while avoiding personal involvement in tax risks. This approach also demonstrates the companys service value and maintains customer trust.
2. If purchasing on behalf is necessary: It is recommended to obtain VAT invoices from the manufacturer and issue corresponding VAT invoices upon export to ensure consistency between input and output taxes. Be sure to confirm operational details with the finance department in advance to avoid future complications.

Practical suggestions

• Consult finance: Have the companys financial personnel assess the specific tax implications of exporting A4 paper to ensure compliance with policies.
• Clear communication with customers: If choosing not to purchase on behalf, honestly explain the reasons (such as tax compliance) and provide reliable contact information for paper mills.
• Complete documentation: Regardless of whether invoices are issued, retain all transaction documents (such as purchase contracts, customs declaration documents) for tax audits.

Summary

Although there is no tax refund for A4 paper exports, not issuing invoices may lead to tax risks. To avoid trouble, it is recommended to let customers deal directly with manufacturers; if purchasing on behalf, VAT invoices must be issued to ensure compliance. Tax issues are complex—do not take chances. Compliance is the way forward.