Chinese financial and tax authorities have announced that since yesterday, have launched the next phase of the pilot program of value added tax (VAT) in all sectors, in accordance with the strategy “a deepening of the country’s tax reforms and fiscal services”.
It will formally take effect from May 1, and will replace the industrial tax. At the same time, VAT will be extended to sectors of the construction industry, real estate, financial and consumer services, thereby reducing the tax burden of all branches of the industry, stated at the Joint Conference of representatives of the Ministry of finance and State administration of taxation.
The rate of VAT will be diverse. Contractors and real estate sector is to take effect, the rate of 11 percent, while the financial services sector and consumption 6 percent.
Possessions were for some time subject to VAT, but the tax is included in the service fee, which is calculated from the value of the sale of the company. This is so the system of taxation, tax included in the price by the purchaser.
The introduction of VAT has to change, and in addition take into account the tax by each link of the chain of production.
According to official estimates, the reform will facilitate the way of taxation and only this year will bring to the budget more than 500 billion yuan (76.9 billion USD). At the same time is to reduce the tax burden of enterprises, especially small businesses, inform the authorities.