Nov. 28 – China will reduce or eliminate value-added tax (VAT) burdens on enterprises that recycle wasted resources during production, in a bid to further promote the country’s circular economy that makes industrial manufacturing more environmentally friendly.
The “Circular on Adjustments of VAT Treatment to Products and Services Output through Comprehensive Utilization of Resources (caishui  No.115)” released by the State Administration of Taxation and Ministry of Finance on November 21, grants an increasing number of recycling companies the eligibility to enjoy favorable VAT treatment.
Starting from August 1, 2011, the following services and product sales are completely exempt from VAT imposition when specific criteria are met:
100 percent-VAT refund upon collection
Starting from August 1, 2011, the sale of the following self-produced products can receive a 100 percent VAT refund upon collection when certain criteria are met:
80 percent-VAT refund upon collection
Starting from January 1, 2011, the sale of the following self-produced products can enjoy a 80 percent VAT refund upon collection when certain criteria are met:
50 percent-VAT refund upon collection
Starting from August 1, 2011, the sale of the following self-produced products – when meeting specific criteria – can be eligible for a 50-percent VAT refund upon collection:
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises with their tax obligations. For advice, please email firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure here.
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