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China Details New VAT Reductions for 1 April Implementation

A series of new VAT reductions are to come into force as of 1 April this year.

Among the headline cuts are the following:

  • General VAT taxpayers who are currently subject to the 16% VAT rate on their sales / imports will see their liability reduced to 13%, while those currently paying VAT at 10% will see the applicable rate fall to 9%
  • In the case of exported goods and services currently subject to the 16% VAT rate and the 16% export tax rebate rate, the export rebate rate will be reduced to 13%. For exported goods and taxable cross-border activities currently subject to the 10% VAT rate and the 10% export tax rebate rate, the export tax rebate rate will be reduced to 9%
  • The foreign tourist shopping tax refund for goods currently subject to the 13% VAT rate will be reduced to 11%, while the refund for goods currently subject to the 9% rate will be reduced to 8%

Details of the changes were announced in a recent circular jointly-issued by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs.

For further details (in Chinese), please access the following link:

Announcement on Policies for Deepening the Value-Added Tax Reform

Content provided by Picture: HKTDC Research
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