The first draft of the value added tax (VAT) law was released by the National People’s Congress (NPC) on 27 December 2022. The aims of the VAT law are to:
- Enhance the adoption of OECD International VAT/ goods and services tax (GST) guidelines into the draft law, in particular by adopting the place of consumption approach in determining whether a transaction has a place of supply within China, and by allowing refunds of excess input VAT credits
- Upgrade the status of the previously bifurcated VAT pilot program rules (applicable to services) and regulations (applicable to goods) to become a single substantive VAT law
Source: KPMG
