- China is expanding VAT to include interest income from government and financial bonds.
- This marks a significant change in the taxation of financial services in China.
- Businesses above GST registration thresholds may now register.
- The VAT re-imposition aims to shift funds from the rates market to equity and credit markets.
- From 8 August 2025, VAT will apply to interest on newly issued treasury, local government, and financial institution bonds.
- This change ends decades of preferential treatment where bond interest was exempt from VAT and previously from the business tax regime.
Source: vatcalc.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "China"
- China’s New VAT Refund Policy for Taxpayers Begins September 2025
- China Expands Consumption Tax to Include More Ultra-Luxury and New Energy Vehicles
- China Expands VAT Refunds for Tourists, Jilin Province Joins Scheme from September 2025
- China Introduces New VAT Refund Policy for End-of-Period Tax Credits Starting September 2025
- China’s Major VAT Credit Refund Policy Adjustments: What Businesses Need to Know