10 Aug 2017
Online CBA: What are the 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 As of 1 July 2017, this superseded the previous four-tier model.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:
|Category||Taxable Transaction||VAT Rate|
|Sale of goods||Sale or importation of goods (except those goods listed separately)||17%|
|Agricultural products (including food grains), LPG, edible salt, feed and books||11%|
|Provision of processing, repair and replacement services||17%|
|Provision of services||Transportation services||11%|
|Basic telecommunications services||11%|
|Value-added telecommunications services||6%|
|R&D and technology services||6%|
|Information technology services||6%|
|Cultural and creative services||6%|
|Logistics and ancillary services ||6%|
|Leasing services (tangible, movable asset financing)||17%|
|Leasing services (immovable asset financing/operation)||11%|
|Broadcasting, film and TV services||6%|
|Commercial ancillary services||6%|
|Other modern services||6%|
|Lifestyle services: cultural and sporting activities, education, healthcare, travel and entertainment, catering and accommodation||6%|
|Other lifestyle services||6%|
|Sale of intangible assets: technology, trademarks, copyright, goodwill and other assets (excluding land-use rights)||6%|
|Sale of intangible assets: land-use rights||11%|
|Sale of real estate||11%|
For further details, please refer to the following websites:
China’s New VAT Rates (full list in Chinese)