VAT in China

Who need to pay VAT…


Entities or individuals who engaged in below taxable behaviors with in the territory of the People’s Republic of China.  


--Sell goods or provide processing, repair, installation service or related sell services.

--Importation of goods.

--Provide taxable services.

--Transfer intangible assets.

--Sell immovable properties.


What is the normal VAT rates…


--13% Sale of goods. Additional, there are 9%, 0% tax rate for agricultural product  and  exportation good sales, respectively.


--9%  Service of communications, constructions, transportation, postal, transfer of intangible of assets and immovable assets, building.


--6%  Finance and insurance, consulting service, leasing, hotel, warehouse and other modern service.


How to calculate VAT payable…


For general VAT taxpayer, VAT taxpayalbe calculate as below.

Output VAT- Input VAT- Additional deduction if have.


If in a certain period, input VAT is large than output VAT, the excess input VAT can be carried forward for set-off in the following periods.


For Non-general VAT taxpayer, use collection tax rate 3% to calculate VAT tax payable as below.

(Revenue excluding VAT)*3%


Please note that from Q1 2019 to Q4 2021, small or mediumsized Non-general VAT taxpayers could be exempted from VAT taxation if their quarterly VAT revenue no more than RMB300,000.


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