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China Introduces Enhanced 15% VAT Tax Credit for Consumer Services Sector

A further 15% value-added tax (VAT) credit is to be offered to taxpayers in the consumer services industry. This latest tax reduction will apply for the period 1 October 2019 to 31 December 2021.

Further details of eligibility include:

  • This applies to taxpayers whose consumer services industry-related sales account for more than 50% of their total sales
  • Taxpayers set up before 30 September 2019 and meet all relevant stipulations are eligible for the additional 15% tax credit as of 1 October 2019. For general taxpayers set up after 1 October 2019, they can also enjoy the tax credit if their sales of the first three months meet the stipulated requirements.

Full details of the policy can be found in the Announcement on Clarifying the Policy of Allowing VAT Credits for Consumer Services (No. 87 [2019)), as issued jointly by the Ministry of Finance and the State Taxation Administration.

Source: Ministry of Finance

Content provided by Picture: HKTDC Research
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