Value Added Tax Reformation in China
On 5th March 2019, the Premier of China released a government work report at the 13th National People’s Congress and announced further tax reductions. In terms of VAT, tax rates shall be reduced. The reduction scope is as follows:
|Taxable transaction||Applicable VAT rate|
|Sales and importation of general goods; provision of processing, repair and replacement services; and provision of leasing services of tangible and moveable assets||16%||13%|
|Sales and importation of specified goods; provision of transportation, postal, basic telecom services, construction services and leasing services of immoveable property; and sales of land use rights or immovable property||10%||9%|
|Provision of value-added telecom services, financial services, modern services and lifestyle services; and sales of intangible assets other than land use rights||6%||6%|
We will keep you updated once further information has been released.The enforcement time of the VAT reduction is not yet determined. We expect that the State Administration of Taxation will issue a regulation after the National Congress and release more details in this aspect.