Dec. 4 – China’s Ministry of Finance and State Administration of Taxation has released the revised regulations on value-added tax, business tax and consumption tax.

The changes for the provisional VAT regulations include: input VAT incurred on the purchase of fixed assets has been removed from the list of non-creditable input VAT; import VAT exemption for fixed assets imported for contract processing, assembly or compensation trade has been canceled; and VAT rate for small-scale taxpayer reduced to 3 percent.

As for business tax, the amended provisions say that for certain eligible businesses, the business taxable turnover can be calculated on a net basis given that the requirements are met. Authorities have also removed on-lending business from the list of eligible businesses.

The list of business tax exempt items added insurance company products used to insure export goods. Under the new provisional business tax regulations, a taxpayer providing taxable labor services will have to file a business tax return at the location of where the taxpayer is located or lives, except for construction business and other taxable services considered by both agencies.

The new provision says that for foreign enterprises or individuals which do not have a business establishment in China but are subject to business tax, their business agent or the purchaser of their taxable services, intangible properties or immovable properties will serve as their withholding agent.

In addition, authorities have removed the detailed scope of each of the tax industries listed in the appendix to the amended provisional business tax regulations to allow for easier updating.

The new provisions for consumption tax will provide the compound corporate income tax rate computation method. They have also changed the list of items and rates for consumption tax.

These taxes are now subject to a new quarterly filing period. According to the China Tax/Business News Flash, taxpayers, either under the monthly or quarterly VAT, business tax and corporate income tax filing period, should make their respective tax return filing and payment within 15 days after the end of each filing period.

The payment due date for imported goods under the VAT and CIT has been changed from seven days to 15 days after the issuance of the payment notice by the customs authority.