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China Streamlines Small-Scale VAT Eligibility Criteria

VAT procedures for small businesses have been simplified as of 1 May this year. According to a joint statement issued by the Ministry of Finance and the State Administration of Taxation, this involves two key changes:

  1. In order to qualify for the preferential 3% small-scale VAT rate, businesses must have an annual turnover of RMB5 million (US$ 789,425) or less
  2. In accordance with the Detailed Rules for the Implementation of the Provisional Regulations of the People’s Republic of China on VAT, any individual or entity currently registered as liable for the general VAT tariff may re-register for the small-scale preferential rate prior to 31 December 2018 should they qualify under the new eligibility criteria

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

Circular on Unifying the Eligibility Criteria of Small-Scale VAT Taxpayers (Cai Shui No. 33 [2018])

Content provided by Picture: HKTDC Research
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