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China Expands VAT-Exemptions for Elderly Care and Medical Service Providers

All elderly care institutions established in accordance with the Law on the Protection of the Rights and Interests of the Elderly and with all the required documentation duly filed with the appropriate Department of Civil Affairs are now to be deemed as exempt from any and all VAT liabilities. This brings them in line with the VAT exemption that has applied to elderly care services supplied by established elderly care institutions since May 2016.

In a further move, any medical institutions providing subcontracted medical services to another healthcare body may apply to be VAT exempt for the period 1 February 2019 to 31 December 2020, providing they meet the following criteria:

i) The medical services in question must be listed on the Specifications for Pricing Items of National Medical Services

ii) The service rates charged must be no higher than the guidance rate stipulated by the departments concerned

iii) The business seeking the VAT waiver must have filed and maintained all the relevant documentation with the appropriate Department of Civil Affairs

These changes to VAT eligibility were recently announced in a circular jointly-issued by the Ministry of Finance and the State Administration of Taxation.

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

Circular on Clarifying the Exemption of Elderly Care Institutions from Value-Added Tax and Other Policies (Cai Shui No. 20 [2019])

Content provided by Picture: HKTDC Research
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