On the 27th of December 2022, the Chinese Government issued a new draft VAT Law. The draft law proposes upgrades to the existing VAT regulations, as well as an enhancement of the adoption of the OECD International VAT/GST guidelines, without increasing the tax burden. VAT is China’s largest source of tax revenue, which is why the progress on its legislation is a big focus of the Chinese government.
Some of the key changes proposed in the 2023 VAT Law include:
- Place of simplified taxation rules
- Scope of taxable activities
- List of non-taxable items
- Mixed sales
- The role of withholding agents
- Definition of input tax
- VAT consolidation
- VAT declaration periods
The public consultation period for the draft VAT law ended on the 28th of January, and its soonest implementation is the summer of 2023.
To consult one of our experts on the applicability of the 2023 VAT Law, please contact us
Author: Gerardo Gutierrez, Associate at TPA Global