November 11, 2008
The Beijing News reports on the State Council’s announcement of a schedule for value-added tax reform. The VAT reform, which is part of a 4 trillion yuan economy stimulus package, was announced yesterday and will go into effect starting January 1, 2009.
According to the article, small-scale taxpayers will benefit most from the tax reform. “Small-scale taxpayer” refers to a business with annual taxable sale value of less than one million yuan (or 1.8 million yuan, depending on the industry).
The new VAT plan will set the value-added tax rate for small-scale taxpayers to 3%, compared to the previous rate of 4% or 6%. Though the new scheme will increase the tax rate on mine products from 13% to 17%, in general it is estimated that the new VAT scheme will result in a 123 billion yuan tax cut next year, with small businesses reaping most of the benefits. China’s total value-added tax income for the 2007 fiscal year was 1.2 trillion yuan
Also on the front page:
Beijing’s Local Taxation Bureau will accepting reports on virtual asset trading starting today. Earlier, the bureau decided to impose a 20% tax on income generated by online trading of virtual assets.
The practicalities of collecting those taxes is widely questioned, because most of these trades are not recorded in document form and are difficult to trace.
- The Beijing News (Chinese): New VAT plan is to be implemented from next year
- The Beijing News (Chinese): Beijing Local Taxation Bureau starts to accept tax report on virtual assets income