VAT Pilot Reform to be Implemented in Beijing and Other Regions from September

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Aug. 3 – On July 31, 2012, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Commencing the Business Tax (BT) to Value-added Tax (VAT) Conversion Pilot Reform in the Transportation and Certain Modern Services Industries in Beijing and Seven Other Provinces and Municipalities (hereinafter referred to as the ‘Notice’)”.

The pilot regions covered under the Notice are:

  • Beijing municipality
  • Tianjin municipality
  • Jiangsu municipality
  • Anhui municipality
  • Zhejiang province (including Ningbo municipality)
  • Fujian province (including Xiamen municipality)
  • Hubei province
  • Guangdong province (including Shenzhen municipality)

According to the Notice, the various provinces and municipalities should complete the conversion by the following dates:

  • September 1, 2012: Beijing Municipality
  • October 1, 2012: Jiangsu Province, Anhui Province
  • November 1, 2012: Fujian Province, Guangdong Province
  • December 1, 2012: Tianjin Municipality, Zhejiang Province, Hubei Province

The Notice requires all pilot regions to commence preparation work for the pilot reform, including recognition and training of pilot taxpayers, adjustment and trial of levying equipment and systems, etc. in order to ensure that the pilot project progresses smoothly and that the BT to VAT conversions will be realized by the planned dates.

As of the date of conversion, the following legislation will apply to the pilot regions, with the Notice providing certain amendments in order to ensure their applicability to the various regions:

  • Caishui [2011] No.111
  • Caishui [2011] No. 131
  • Caishui [2011] No. 132
  • Caishui [2011] No. 53

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