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China VAT Rates to be Cut as of 1 May

As of 1 May, a number of substantial changes are to be introduced to the mainland VAT regime:

  • VAT on manufacturing is to be cut from 17% to 16%
  • VAT on transportation, construction, basic telecommunication services and certain goods (including farm produce) is to be cut from 11% to 10%
  • The threshold for small-scale taxpayers in both the industrial and commercial sectors is to be unified at RMB5 million (US$800,000). Previously, it was RMB500,000 in the case of industrial businesses and RMB800,000 for other commercial entities. Any eligible business currently registered as a general taxpayer will also be permitted to switch to small-scale taxpayer status

The decision to implement these VAT reforms was taken by the State Council during its 28 March executive meeting.

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

State Council Executive Meeting Resolves to Deepen VAT Reform and Further Lighten Tax Burden on Market Entities

 

Content provided by Picture: HKTDC Research
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