China announces detailed VAT reform measures

Chinese authorities Thursday announced detailed measures to implement the country's value-added tax (VAT) reform to further reduce the tax burden on various industries.

Starting April 1, taxpayers that are subject to the 16 percent VAT rate on their taxable sales or imported goods will enjoy a 13 percent VAT rate, while those who are subject to the 10 percent VAT rate will only need to pay 9 percent, according to a joint statement released by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs.

Buyers of agricultural goods who are subject to a 10 percent deduction rate, which is used to calculate input VAT, will be subject to a nine percent deduction rate, according to the statement.

The statement also laid out a series of supporting measures for VAT reform such as the extension in the scale of goods and services eligible for input tax deductions.

The announcement came after a State Council's executive meeting Wednesday, which decided that the country will implement a slew of measures to cut the VAT rates, making sure that tax burdens on all industries will only go down, not up.