On the 27th of December 2022, the Chinese Government issued a new draft VAT Law. The draft law proposes upgrades to the existing VAT regulations, as well as an enhancement of the adoption of the OECD International VAT/GST guidelines, without increasing the tax burden. VAT is China’s largest source of tax revenue, which is why the progress on its legislation is a big focus of the Chinese government.
Some of the key changes proposed in the 2023 VAT Law include:
- Place of simplified taxation rules
- Scope of taxable activities
- List of non-taxable items
- Mixed sales
- The role of withholding agents
- Definition of input tax
- VAT consolidation
- VAT declaration periods
The public consultation period for the draft VAT law ended on the 28th of January, and its soonest implementation is the summer of 2023.
Source TPA
