The Development of High-Tech Enterprises under the Value Added Tax Reform
1. Q: Who is the taxpayer of the Value Added Tax (VAT)?
A: Entities and individuals engaged in the sale of goods, supply of processing, repair and replacement services, and import of goods within the territory of the People's Republic of China are taxpayers of value added tax (hereinafter referred to as “taxpayers” ), and shall pay VAT.
2. Q: What’s the general rate of the VAT pursuant to Chinese Law?
A: VAT rates:
1). For taxpayers selling or importing goods, other than those as specified in Items 2 and 3 of this Article, the tax rate shall be 17%.
2). For taxpayers selling or importing the following goods, the tax rate shall be 13%.
a. food grains, edible vegetable oil;
b. tap water, heating, air conditioning, hot water, coal gas, liquefied petroleum gas, natural gas, methane, and coal/ charcoal products for household use.
c. books, newspapers, magazines;
d. feed, fertilizer, pesticide, agricultural machinery and agricultural film; and
e. other goods as prescribed by the State Council.
3). For taxpayers exporting goods, the tax rate shall be zero, except as otherwise prescribed by the State Council.
4). For taxpayers supplying processing, and repair and replacement services (hereinafter referred to as “taxable service”), the tax rate shall be 17 %.
Any adjustments to the tax rates shall be decided by the State Council.
3. Q: Who is the taxpayer of the Business Tax?
A: All entities and individuals engaged in the provision of services as prescribed in the present Regulation, the transfer of intangible assets or the sale of immovables within the territory of the People's Republic of China shall be taxpayers of the business tax, and shall pay the business tax in accordance with these Regulations.
4. Q: What is the range of the transportation industry?
A: The transportation industry includes: Landway transportation, waterway transportation, aviation transportation and pipeline transportation.
5. Q: What is the range of the modern service industry?
A: The modern service industry includes: information technology, culture innovation, Logistics support, visible movable leasing and authenticate advisory service.
6. Q: What is the most important impact of the reform?
A: The reform could reduce the fact of double taxation and reach the goal of reducing the general taxation.