Our collection of resources based on what we have learned on the ground
Resources
Q&A
When was the value-added tax (VAT) reform implemented in China?
- May 2014
- Free Access
On August 1, 2013, the VAT pilot reform was implemented nationwide, as formalized by the promulgation of the Notice Concerning the Nationwide Adoption of VAT in lieu of Business Tax Pilot Tax Collection Policy in the Transportation Industry and Ce...
infographic
Input and Output Value-added tax in China
- May 2014
- Free Access
The flow of Input and Output Value-added tax in China.
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Chinese Value-Added Tax (VAT) Reform Rates Chart
- May 2014
- Free Access
Different VAT rates for different industries in China.
Q&A
How are value-added tax and business tax defined in China?
- May 2014
- Members Access
Value-added tax is levied on the sales and import of tangible goods, and the provision of processing, repair and replacement services. Depending on the status of the taxpayer, being either small-scale or general, the tax rate ranges from 3 percent &n...
Q&A
Are value-added tax (VAT) and business tax mutually deductible in China?
- May 2014
- Members Access
Value-added tax (VAT) and business tax (BT) are not mutually deductible in China. This means that businesses selling and importing goods are not able to claim deduction for the purchase of services, while service providers are not able to claim deduc...
Q&A
What are the different statuses for value-added tax (VAT) payers in China?
- May 2014
- Members Access
VAT taxpayer statuses are divided into two categories: general taxpayers and small-scale taxpayers. General taxpayers are taxpayers with an annual sales volume of taxable services equivalent to or exceeding RMB5 million, while small-scale taxpayers a...
Q&A
What if an entity provides services that are subject to different value-added ta...
- May 2014
- Members Access
If a taxpayer provides taxable services that are subject to different rates, the sales volume for each tax rate should be accounted for separately, or else the highest tax rate applies. Similarly, VAT taxpayers who concurrently provide services subje...
Q&A
How is value-added tax (VAT) calculated for foreign entities or individuals in C...
- May 2014
- Members Access
If an overseas entity or individual provides taxable services in China and does not have an operating entity in China, the tax withholding party should calculate the amount of tax to be withheld using the following formula: Amount of tax to be wit...
Q&A
What is the difference between zero-rated value-added tax (VAT) and VAT exempt s...
- May 2014
- Members Access
The difference between zero-rated and exempted VAT is that, under zero-rated VAT the input VAT attributable to the export of services can be credited from VAT payable and/or refunded. Under the VAT exemption system, the input VAT attributable to expo...
Q&A
What happens if a service is eligible for both value-added tax (VAT) zero-rating...
- May 2014
- Members Access
If a service is eligible for both VAT zero-rating and VAT exemption, VAT zero-rating takes precedence over VAT exemption. Providers of zero-rated VAT services may opt to pay VAT or apply for VAT exemption instead by filing a relevant declaration. How...
Q&A
How does an enterprise obtain tax exemption for exported services in China?
- May 2014
- Members Access
To obtain exemption for exported services, a written cross-border service contract must be signed with the service recipient. In addition, the entire income from providing the service must be obtained from overseas. This could pose problems for inter...
Q&A
Has the tax burden for logistics enterprises increased due to the value-added ta...
- May 2014
- Members Access
The tax burden for logistics enterprises has nearly doubled since the implementation of the pilot reform. The 11 percent VAT rate for transportation industries replaced the previous 3 percent business tax (BT); while storage, delivery and cargo forwa...
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