Another VAT rate reduction on Chinese companies

published on March 5, 2019 | reading time approx. 1 minute
 
​The second conference of the 13th National People’s Congress of China has just announced that the current VAT rate of 16 per cent, which is applicable to industries including manufacturing, will be decreased to 13 per cent. Meanwhile the rate of 10 per cent, which is applicable to industries including transportation and construction, will be decreased to 9 per cent, and the rate of 6 per cent, which is applicable to industries including modern service, will remain unchanged. In this way, the Chinese government endeavors to ensure a considerable decrease in tax burden for major industries and an overall decrease in tax burden in all industries.
 

 
Since May 1st, 2018, the basic rates of Chinese VAT have been decreased from 17, 11 and 6 per cent to 16, 10 and 6 per cent. After an interval of less than 1 year, Chinese VAT rates will step into a second round of decrease. The further reduction of VAT rates is good news for many industries and eventually benefits end-customers. The State Taxation Administration is expected to release tax regulation shortly, in order to specify the details including the effective date of the decreased VAT rates, as well as possible practice measures during transition period. We will keep you updated as soon as the regulation is announced.