Shanghai VAT Pilot
Fundamental change to China's indirect tax system from 2012
China's government has been considering undertaking a valued added tax (VAT) reform for a few years. On November 16, 2011, the Ministry of Finance and State Administration of Taxation announced that they would start the reform process through a VAT Pilot program starting in Shanghai from January 1, 2012. VAT and business tax (BT) currently account for close to 50 percent of the China government's tax revenue collection and making adjustments to such an important system needs to be carefully studied and monitored. The Shanghai VAT Pilot program gives the Chinese government an opportunity to test run any reform policies.
The VAT Pilot will have a significant impact all companies that have businesses in China but particularly in dealing with Shanghai-based entities. The Pilot will affect "in-scope" companies but will also directly affect many "out-of-scope" businesses (for example, those who engage in transactions with in-scope businesses in Shanghai). There is not much time before the January 1 effective date to understand the impact to your organization and adapt to the new environment. Therefore, companies need to act now in order to be well-prepared for the many tasks that need to be completed.
Join our panelists for this timely webcast as they discuss:
- General principles behind China's VAT and BT
- The Shanghai VAT Pilot: detailed rules and in-scope and out-of-scope services
- What does the Pilot mean to my company?
- Future developments