- China approved a new value-added tax law set to take effect on January 1, 2026
- The law consolidates previous regulations and includes exemptions for certain items
- VAT is the largest tax category in China, making up about 38 percent of national tax revenue in 2023
- Exemptions in the new law cover some agricultural products, certain imported scientific and educational instruments, goods for the disabled, and services by welfare institutions
- The government can add new items to the list of tax deductibles to support specific sectors or businesses
- With this law, 14 out of 18 tax categories in China now have their own laws, enhancing the statutory taxation system
- The law was passed during a session of the National People’s Congress Standing Committee
- Recent tax incentives were introduced to support the property market, including VAT exemptions on home sales after two years
- In September 2023, a VAT refund policy was extended to encourage purchases of Chinese-made equipment by domestic and foreign research entities until 2027
- VAT rates for manufacturers and the transportation and construction sectors were reduced in 2019
- Despite a drop in VAT revenue in the first 11 months of the year, there was a slight increase in November, indicating some economic recovery
Source: channelnewsasia.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
