Posted by PTL Group
PTL Group
PTL Group has not set their biography yet
User is currently offline
on Tuesday, 17 October 2017
in Business in China

China Deepens the VAT Reform

China’s Value Added Tax (VAT) reform was introduced in 2012 and implemented national wide in May 2016. From May 2016 to June 2017, 85.12 billion RMB has been cut from companies’ burden, according to the Ministry of Finance.

Premier Li Keqiang confirmed that China will continue to refine VAT reform, following an August 18th meeting of the State Council Executive Meeting.

The VAT reform programs announced this year continue to streamline and simplify China's tax structure.

 There are four major changes as followed:

1.Tax tiers have been reduced from four to three tiers (now 6 percent, 11 percent, and 17 percent, with the 13 percent tier removed) and reduce tax rates for farm products, tap water, and publications from 13 percent to 11 percent.

2.Small and midsize companies, as well as those in the service sector, are also set to see benefits. According to South Money, the annual taxable earnings of companies have been lifted from 300,000 RMB to 500,000 RMB. Companies with 500,000RMB or less income will enjoy a discounted corporate income tax rate of 20%, compared with a standard rate of 25%. This tax benefit will be valid until the end of 2019.

3.Additionally from January 2017 to December 2019, R&D and high tech Small and Medium enterprises can enjoy a 75% super deduction from their R&D expenses of developing new technology and new products. The super deduction rate before reform was 50%.

4.8 pilot reform pilot areas including Beijing and Shanghai were introduced to the beneficial tax reform. For the start-ups in their seed stage, 70% of the investment amount can be deducted from the income. From July 1st, the benefits expanded from enterprise investors to individual investors.4.the income. From July 1st, the benefits expanded from enterprise investors to individual investors.

A commitment to future progress on VAT reform was also institutionalized, with pledges made to push forward legislation on VAT reform, to increase the use of digital filing methods and electronic invoices and fapiaos, and to provide more training for taxpayers to familiarize themselves with the new tax structures.



Tags: Untagged


No comments made yet. Be the first to submit a comment

Leave your comment

Guest Wednesday, 12 December 2018