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Online CBA: What are the Current VAT Rates in China?

Photo: Current VAT rates in China
Photo: Current VAT rates in China

Q: What are the current VAT rates in China?

A: In line with China’s recent tax reforms, business transactions which previously incurred business tax are now, instead, subject to value-added tax (VAT), with the problem of double taxation in certain service sectors under the previous regime now eliminated. As its name suggests, in the case of both products and services, VAT only taxes the value-added at each stage in the supply chain.

In order to simplify the overall process, the State Council has introduced a new three-tier VAT regime. As of 1 July 2017, this superseded the previous four-tier model. The basic VAT rates in China are now 17%, 11% and 6%, with the 13% tax rate now abolished.

Full details of the new VAT rates are as follows:

CategoryTaxable TransactionVAT Rate
Sale of goodsSale or importation of goods (except those goods listed separately)17%
Agricultural products (including food grains), LPG, edible salt, feed and books11%
Provision of processing, repair and replacement services17%
Provision of servicesTransportation services11%
Postal services11%
Basic telecommunications services11%
Value-added telecommunications services6%
Construction services11%
Financial services6%
R&D and technology services6%
Information technology services6%
Cultural and creative services6%
Logistics and ancillary services
6%
Leasing services (tangible, movable asset financing)17%
Leasing services (immovable asset financing/operation)11%
Certification services6%
Broadcasting, film and TV services6%
Commercial ancillary services6%
Other modern services6%
Lifestyle services: cultural and sporting activities, education, healthcare, travel and entertainment, catering and accommodation6%
Other lifestyle services6%
Sale of intangible assets: technology, trademarks, copyright, goodwill and other assets (excluding land-use rights)6%
Sale of intangible assets: land-use rights11%
Sale of real estate11%

For further details, please refer to the following websites:

Provisions of New Three-Tier VAT Regime Announced

China’s New VAT Rates (full list in Chinese)

Content provided by Picture: HKTDC Research
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