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China Business Tax Completely Scrapped Under Extended VAT Regime
12 December 2017
As of 1 December this year, companies in the service sector are no longer obliged to pay business tax. Instead, however, all such businesses are now liable under an extended VAT regime, which covers any business entity / individual engaged in the sale of services, intangible assets or immovable properties. In all such instances, VAT will be levied in line with the prevailing rates – 17%, 11% or 6% – with the applicable level determined by the pertaining business category. In the case of small-scale taxpayers falling below the RMB 500,000 revenue threshold, a reduced VAT rate of 3% will be deemed to apply.
The change was outlined in the Decision on Abrogating the Interim Regulations on Business Tax and Amending the Interim Regulations on Value-added Tax, as recently issued by the State Council,
For further details (in Chinese), please refer to the following link:
- Mainland China
- Mainland China
