China Releases Circular on Reporting VAT Collection Data
Oct. 15 – To establish a mechanism for reporting the dynamic information and data relating to the pilot collection of value-added tax (VAT) in lieu of business tax, China’s Ministry of Finance (MOF) released the “Circular on Properly Handling the Reporting of Information and Data on the Pilot Collection of Value-added Tax in Lieu of Business Tax (caishuiban No. 29, hereinafter referred to as the ‘Circular’)” on September 27, 2012.
According to the Circular, each pilot province, municipality directly under the central government, and cities specifically designated in the state plan shall formulate and distribute the dynamic information on the pilot collection of VAT in lieu of business tax and report such information to the MOF on an irregular basis. Meanwhile, the above-mentioned regional authorities shall file and report the relevant operating data based on the declared tax information and other relevant information and materials provided by taxpayers through the direct reporting platform on the website of the MOF. This data should be published within five working days after the end of the tax declaration period each month, and the responsible regional authorities should formulate an operation appraisal and analysis report to be sent to the Tax Policy Department of the MOF.
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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.