There are two kinds of VAT taxpayer in China ( Publicity PR ) by the criterion of turnover of sale goods & services and condition of accounting system. One is common taxpayer,and the other is small taxpayer.
Briefing of VAT Under China’s Tax System
Tax Policy Department
Ministry of Finance
China started to implement VAT in 1984 on 24 specified taxable items. In 1994, which corresponds to the objective of reform of building a socialist market economy under the guideline of unification of taxation management, equity of the tax burden, simplifying the tax system, income distribution reasonalization relations and ensure the financial income, the old system is a comprehensive tax reform and structural. On December 13, 1993, the State Council of China ( Public Relations Melbourne ) promulgated “The Provisional Regulation of the People’s Republic of China on Value Added Tax”?enter into force on January 1, 1994 and took effect in China today
.
VAT, issued by the State Administration of Taxation (tax on imports imposed by customs on his behalf), and revenues are apportioned between the central government (75%) and municipalities (25%). VAT, the main source of revenue for the government of China, in particular, the central government
. In 2002, revenues from VAT are 814.1 billion yuan,explain 47.61% of the state entire tax income of the year,which is the first biggest tax in China.
1. The current VAT system of China
Taxpayers
According to The Provisional Regulation of P.R.C on VAT, Value-added tax should be paid by enterprises or individuals who sell merchandise, provide processing, repairing, or assembling service, or import goods within the territory of the People’s Republic of China ( PR agency ) on the added value derived from their production, selling merchandise, providing industrial repairing or assembling service.
Taxable items and tax rates
Based on different taxable goods, services, different flat rates and zero rate are adopted. The table of the taxable items and rates is as following:
Table of VAT Taxable Items and Rates
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