Core Viewpoint - The article provides a comprehensive overview of the value-added tax (VAT) treatment for construction services, detailing the applicable policies, tax rates, and exemptions for small-scale taxpayers in the construction industry [2][3]. Tax Policy Highlights - **Scope of Construction Services**: Construction services encompass the construction, repair, decoration, installation of various buildings, structures, and associated facilities, including engineering, installation, repair, decoration, and other related services [3]. - **Tax Payment Location**: Taxpayers must prepay VAT at the location where the construction service occurs when receiving advance payments. If the service does not require prepayment at the service location, it should be prepaid at the taxpayer's registered location [5]. - **Prepayment Rates**: The prepayment rate for projects using the general taxation method is 2%, while those using the simplified taxation method have a prepayment rate of 3% [6]. Exemptions and Reductions - **Small-scale Taxpayer Exemption**: From January 1, 2023, to December 31, 2027, small-scale taxpayers with monthly sales not exceeding 100,000 yuan at the prepayment location are exempt from prepaying VAT. If sales exceed this threshold, the prepayment rate is reduced to 1% for applicable projects [8]. - **Documentation for Deductions**: Taxpayers must provide copies of invoices from subcontractors and contracts with both the main contractor and subcontractors to deduct payments made to subcontractors from the total price [8]. - **Overseas Construction Services**: Construction services provided for projects located overseas are exempt from VAT, applicable to both general contractors and subcontractors [9]. Policy References - The article cites relevant policies, including the notice from the Ministry of Finance and the State Administration of Taxation regarding the comprehensive implementation of VAT reform and the management of VAT collection for cross-county construction services [10].