On 1 January 2014, China will bring in new VAT reforms in the Financial Industry. The government plan to levy VAT on banking and insurance sectors so as to replace the current 5% Business tax. This current tax system includes no resources to recover input tax. The new VAT rate will be between 11% and 16%.
The Chinese VAT reform began in 2012 as a pilot scheme and was introduced to the entire country in 2013 with its main goal being to replace the old Chinese VAT system.
For more information on Chinese VAT reform click here