China’s VAT Reform Saves Taxpayers RMB40 Billion

February 7, 2013 Posted by China Briefing Reading Time: 2 minutes

Feb. 7 – China’s value-added tax (VAT) reform has saved taxpayers that participated in the pilot program more than RMB40 billion, according to a conference held by the Ministry of Finance and the State Administration of Taxation on February 1, 2013.

As of February 1, the number of taxpayers included in the scope of the VAT reform has reached over 1 million. The reform, replacing business tax with value-added tax in the transport sector and certain services sectors, was first rolled out in Shanghai on January 1, 2012, and was later expanded to another 11 regions, namely:

Beijing
Tianjin
Jiangsu
Zhejiang
Ningbo
Anhui
Fujian
Xiamen
Hubei
Guangdong
Shenzhen

Currently, VAT is levied on the sales and import of tangible goods, and the provision of processing, repair and replacement service, while business tax is levied on turnover from providing taxable services, transferring intangible assets and selling immovable properties.

The meeting also proposed to improve the pilot policies, further expand the scope of reform areas, as well as duly implement the pilot reform in the transport sector and certain modern service sectors nationwide.

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