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Provisions of New Three-Tier VAT Regime Announced

In line with its policy of VAT reform, including the abolition of business tax in selected service sectors and the streamlining of the relevant tax bands, the State Council has announced a new three-tier VAT regime. This has seen the previous four-tier system simplified into three (17%, 11% and 6%) as of 1 July this year, with the 13% tax rate scrapped entirely.

Details of the new VAT regime are listed below:

CategoryTaxable TransactionVAT Rate
Sale of goodsSale or importation of goods (except goods separately listed)17%
Agricultural products (including food grains), LPG, edible salt, feed and books11%
Provision of processing, repair and replacement services17%

Provision of services

Leasing services17% or 11%
Transportation services11%
Postal services11%
Construction services11%
Telecommunications services11% or 6%
Financial services6%
R&D and technology services6%
Information technology services6%
Cultural and creative services6%
Logistics and ancillary services
6%
Certification services6%
Broadcasting, film and TV services6%
Commercial ancillary services6%
Other modern services6%
Lifestyle services6%
Sale of real estate11%
Sale of intangible assets11% or 6%

 

For further details, please refer to the following websites:

New VAT Rates (in Chinese)

13% VAT Charge Revoked as of 1 July

Content provided by Picture: HKTDC Research
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