Guangdong Province Releases Announcement on Tax Conversion

September 24, 2012 Posted by China Briefing Reading Time: 2 minutes

Sept. 24 – The Guangdong Provincial Office of the State Administration of Taxation (SAT) released the “Announcement on Launching the Pilot Collection of Value Added Tax (VAT) in lieu of Business Tax in Transportation and Certain Areas of Modern Services Industries in Guangdong Province (Announcement [2012] No.6, hereinafter referred to as ‘Announcement’)” on September 18, aiming to promote the smooth implementation of the pilot conversion. Key information of the Announcement can be found below.

According to the Announcement, organizations and individuals engaged in transportation and certain areas of modern services industries (hereinafter referred to as “taxable services”) in Guangdong Province shall pay VAT instead of the business tax from November 1, 2012.

The scope of taxable services include the following:

Transportation industry

Land transportation services
Water transportation services
Air transportation services
Pipeline transportation services

Research and development (R&D) and technical services

R&D services
Technology transfer services
Technology consultation services
Services under energy management contracts
Project survey and exploration services

Information technology services

Software services
Circuit designing and testing services
Information system services
Business process management services

Cultural creativity services

Designing services
Trademark and copyright transfer services
Intellectual property services
Advertisement services
Meeting and exhibition services

Logistics and auxiliary services

Air services
Port and dock services
Freight and passenger terminal services
Salvage services
Freight forwarding services
Customs declaration agency services
Storage services
Loading and unloading and transportation services

Tangible movable property leasing services

Tangible movable property financing lease
Tangible movable property operating lease

Accreditation and consultation services

Accreditation services
Verification services
Consultation services

Pilot taxpayers engaged in the above taxable services shall, as required by the relevant state tax authorities, go through the formalities for tax registration, tax type identification, invoice type verification, general taxpayer recognition, tax-control system application, invoice purchase and collection, tax preference application, and tax-exemption registration for export refund before October 31, 2012.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across China by subscribing to The China Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

Value-Added Tax Reform
VAT reform is a confusing transition for many and introduces a number of additional questions, such as exactly what types of input VAT are now deductible. Confusion about the new laws may also allow opportunistic companies to charge higher prices and blame the increase on the tax reform. To add some clarity to the issue – and VAT in general – this issue of China Briefing takes a look at a number of VAT-related questions.