Various agencies in China jointly released new policies and implementation rules under the value added tax (VAT) regime.
The new VAT policies and rules are intended to align China’s VAT regime with OECD principles. It is anticipated that China’s new VAT policies and rules will provide relief for businesses by reducing the overall tax burden and by enhancing economic activity in certain sectors.
Earlier this month, the Chinese government announced a reduction of the “standard” VAT rate from 16% to 13% and a reduction of the “reduced 10%” VAT rate to 9%. It has been confirmed that these rate reductions will be effective beginning 1 April 2019.
With the recent VAT policy announcements, China is taking steps to apply international “best practice” with respect to the VAT regime. In addition to formalizing the reduction in VAT rates, the new rules will:
Read a March 2019 report prepared by the KPMG member firm in China
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