Tax & Accounting Blog

China to Expand Pilot VAT Program Nationwide

Indirect Tax, Transaction Tax April 17, 2013

On 10 April China’s State Council announced that it will be expanding its successful Pilot VAT program sooner than had been expected. On 1 August the program, which is currently limited to 12 regions, will go nationwide. The Pilot was implemented last year beginning with Shanghai and followed by 11 more provinces and municipalities including Beijing, Tianjin and Shenzhen. Along with the geographic expansion the program will also be expanded to include film, radio and television industries. The government plans to add railway transport, postal services and telecommunications industries at a future date and intends to complete the reform by the end of 2015.

It is estimated that this expansion of the program will reduce tax burdens by about 120 billion yuan ($19.04 billion) this year, according to the announcement.