China’s Ministry of Finance and the State Administration of Taxation (STA) issued guidance on 21 and 22 March 2022 (Circulars No. 14 and 4) that allows qualifying taxpayers to obtain a refund for excess input VAT credits on a monthly basis. Circular No. 14 sets out the new policy and Circular No. 4 includes the implementing rules. On 24 March, the STA issued Circular No. 15, which provides an exemption from VAT for small-scale taxpayers for the period 1 April through 31 December 2022. These new policies—which apply as from 1 April—are designed to ease the burdens on businesses, support the development of micro and small enterprises, boost the manufacturing and other sectors, and enhance the confidence of market participants.
Source: BDO
