Central China VAT reform

by Edward Ma, Manager, Corporate Accounting Services, Dezan Shira & Associates, Beijing

On July 1, 2004, the northeast region of China began trial VAT reform. The new regulation identified eight industries that were eligible to deduct input VAT from VAT for machinery equipment purchasing. According to a survey, the new added input VAT related to machinery equipment purchasing was RMB12.19 billion by the end of 2006. The new deducted input VAT was RMB9.062 billion. The new policy has assisted the local enterprises’ development.

Considering the relatively slow development of central region enterprises, China has begun to consider a VAT reform plan in these regions. VAT reform will reduce the tax burden of enterprises located in central China, and strengthen their competitive capability.

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This article included in China Briefing Magazine

June 2007: Upgrading Your China Entity

Other articles in this issue: Shenyang European Union Economic / Technical Development Zone by Lina Wang, Senior Associate, Business Advisory Services, Dezan Shira & Associates, Dalian Hangzhou tax incentives for landlords on rental of real estate by Nicole Yao, Associate, Corporate Accounting Services, Dezan Shira & Associates, Hangzhou Developments along the Yangtze River by Olaf Griese, Senior Business Development Associate, Dezan Shira & Associates, Shanghai Growing importance of an environmental evaluation reports in Guangdong by Rosario Di Maggio, Senior Associate, Dezan Shira & Associates New developments for China's Foreign Trade Companies inside the Yantian and Futian Free Trade Zones and Bonded Logistics Parks by Susan Wang, Senior Associate, Dezan Shira & Associates, Shenzhen