21 March 2019
China is Set to Cut Business VAT and Mandatory Pension Contributions
The VAT rate for mainland businesses is to be cut as of 1 April this year. In the manufacturing sector (and related industries) it is to fall from 16% to 13%, while in the transportation, construction and other related industries, it is to be reduced from 10% to 9%.
In a related move, as of 1 May, the mandatory social security pension contribution due from businesses in relation to their urban employees is to be cut from 20% to 16%.
The two changes were announced by Li Keqiang, the Chinese Premier, on 15 March. In a statement, he indicated that the cuts were in line with the commitments made as part of the Government Work Report with regard to substantially lowering the tax burden on many of China’s key industrial sectors.
For further details (in Chinese), please access the following link: