A notice (Cai Shui  No. 32) has jointly released by Ministry of Finance and State Administration of Taxation on April 4, 2018, stipulating that the VAT rate applicable to manufacturing and trading industry shall be decreased from the current 17% to 16%, for transportation, construction and basic telecommunications services and agricultural products sector, the VAT rate shall be adjusted from 11% to 10%. The aforesaid adjustment shall take effect from May 1, 2018. After the adjustment, the VAT rate shall be divided into four levels, 16%， 10%， 6% and 3%.
1. This time’s VAT rate adjustment does not cover service type enterprise qualified as VAT general taxpayer and enterprises of VAT small-size taxpayer, and the applicable VAT rate of which remains as 6% and 3% respectively. For other types of enterprises qualified as VAT general taxpayer, the applicable VAT rate drops from 17% and 11% to 16% and 10% respectively. The adjustment has reduced the tax burden and put a positive impact on these enterprises operation.
2.The rebate rate shall also be decreased due to this VAT rate adjustment. The adjusted rebate rate shall be divided into eight levels with 0%, 5%, 6%, 9%, 10%, 13%, 15% and 16%, subject to HS code of the exported goods.
3.For VAT general taxpayer enterprises not classified into service industry, we would like to kindly remind you to pay attention to the issues including but not limited to below items during the process of VAT rate adjustment:
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