Beijing Likely to Commence VAT Reform in August
Jul. 10 – Earlier this year, following the commencement of the business tax (BT) to value-added tax (VAT) conversion pilot reform program in Shanghai, the Beijing municipal government officially submitted its application to the Ministry of Finance (MOF) and State Administration of Taxation (SAT) to implement the pilot program in Beijing. Since then, enterprises have been awaiting news on its official approval.
In July 2012, tax authorities in Beijing started requiring companies falling under certain sectors to submit forms that include surveys requesting information on total business revenue, as well as applications for general VAT taxpayer status under the pilot project. These forms are due July 13, 2012. Companies that are required to submit these forms are generally engaged in technology related services, R&D services, and consulting in Beijing.
While there is still no official news confirming the approval of the pilot program by the State Counsel, it is likely that the pilot program will commence on August 1, with the VAT filing for services under the pilot program to start in September.
The pilot program will have a substantial impact on both pilot enterprises as well as those doing business with these enterprises. Enterprises are therefore advised to familiarize themselves with the details of the program and conduct all necessary preparations accordingly.
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. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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.
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.
- Previous Article China Releases 12th Five-Year Plan for the Wine Industry
- Next Article Dispute Resolution in China – The Disintegration of CIETAC