Breaking! CHINA To Cut The VAT Rates & Change Tax Standard!
BEIJING, March 28 — China will cut value-added tax (VAT) rates as part of a tax reduction package amounting to 400 billion yuan (about 63 billion U.S. dollars) this year.
The decision was made at a State Council executive meeting chaired by Premier Li Keqiang on Wednesday. It is expected to boost high-quality development.
This round of tax cuts will apply to all manufacturing companies. All businesses registered in China, be they joint ventures or wholly foreign owned companies, will be treated equally, according to the premier.
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The reform has also boosted entrepreneurship, innovation and the development of new industries and new forms of business. Micro and small firms have been the biggest beneficiaries in this process!
As part of the tax cut package, eligible enterprises in advanced manufacturing, modern services and electric utility shall receive a lump-sum refund for their input VAT payments yet to be deducted.
The meeting also decided to unify the standard for small-scale taxpayers, as it raises the threshold of taxable annual sales volume for industrial and commercial enterprises from 500,000 yuan and 800,000 yuan, to 5 million yuan.
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Enterprises registered as general taxpayers will be allowed to switch their status to small-scale taxpayers within a given time.
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Li said that reducing the three tax rate brackets to two in one go was a hugely challenging job, as reforms are normally pursued step by step. Yet the goal was not beyond reach.
He stressed that no industry should see its tax burden increase in the course of VAT reform. This will be the guiding principle of all relevant reform measures.
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Source | XinhuaNews