China To Cement New VAT Regime In Law

by Mary Swire, Tax-News.com, Hong Kong

02 November 2017

China's State Council elaborated on the country's plans to continue value-added tax reform at its meeting on October 30, 2017.

China has now extended VAT to all areas of the economy, having first launched a pilot program in Shanghai in 2012, and has fully phased out business tax.

The meeting adopted a draft law that would repeal existing business tax regulations and include in new legislation provisions included in China's various VAT regulations (called Cai Shui), which were introduced as the scope of VAT was expanded.

The meeting also agreed that the tax rate for selling or importing goods such as grain, books, and feed should be reduced from 13 percent to 11 percent.

It also said that transitional policies for certain economic sectors should remain unchanged.

Last, it agreed that future regulations issued on the obligations of value-added tax-registered persons should be issued by the State Council, or by approved financial and tax departments.

In July, China approved plans to reduce the number of tax rates from four to three, installing rates of 6, 11, and 17 percent.

TAGS: tax | business | value added tax (VAT) | law | China | legislation | tax rates | tax reform | regulation

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