China Extends VAT Exemption for Domestically-Produced AIDS Medication

Mainland-manufactured AIDS drugs produced / distributed between 1 January this year and 31 December 2020 will continue to be VAT-exempt.

To be eligible for this exemption, said drugs must have been procured by the AIDS drug administrative departments of the appropriate regional authority in accordance with relevant government procurement regulations and subsequently dispensed free of charge to those in need. Drug manufacturers and distributors are also obliged to retain the relevant drug supply contracts for any future inspection by the tax authorities.

Details of these new requirements were outlined in the Circular on Continuing the Policies for the Exemption of Value-Added Tax (VAT) on Domestically-Manufactured AIDS Drugs, as recently issued by the Ministry of Finance and the State Administration of Taxation.

Source: State Administration of Taxation