Guangdong Province Releases Announcement on Tax Conversion

Sept. 24 – The Guangdong Provincial Office of the State Administration of Taxation (SAT) released the “Announcement on Launching the Pilot Collection of Value Added Tax (VAT) in lieu of Business Tax in Transportation and Certain Areas of Modern Services Industries in Guangdong Province (Announcement [2012] No.6, hereinafter referred to as ‘Announcement’)” on September 18, aiming to promote the smooth implementation of the pilot conversion. Key information of the Announcement can be found below.

According to the Announcement, organizations and individuals engaged in transportation and certain areas of modern services industries (hereinafter referred to as “taxable services”) in Guangdong Province shall pay VAT instead of the business tax from November 1, 2012.

The scope of taxable services include the following:

Transportation industry

• Land transportation services
• Water transportation services
• Air transportation services
• Pipeline transportation services

Research and development (R&D) and technical services

• R&D services
• Technology transfer services
• Technology consultation services
• Services under energy management contracts
• Project survey and exploration services

Information technology services

• Software services
• Circuit designing and testing services
• Information system services
• Business process management services

Cultural creativity services

• Designing services
• Trademark and copyright transfer services
• Intellectual property services
• Advertisement services
• Meeting and exhibition services

Logistics and auxiliary services

• Air services
• Port and dock services
• Freight and passenger terminal services
• Salvage services
• Freight forwarding services
• Customs declaration agency services
• Storage services
• Loading and unloading and transportation services

Tangible movable property leasing services

• Tangible movable property financing lease
• Tangible movable property operating lease

Accreditation and consultation services

• Accreditation services
• Verification services
• Consultation services

Pilot taxpayers engaged in the above taxable services shall, as required by the relevant state tax authorities, go through the formalities for tax registration, tax type identification, invoice type verification, general taxpayer recognition, tax-control system application, invoice purchase and collection, tax preference application, and tax-exemption registration for export refund before October 31, 2012.

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