How does the VAT system work in China?
The Chinese government applies it on the sale of goods and services. VAT isn’t paid by businesses — instead, it’s charged to consumers in the price of goods, and collected by businesses, making it an indirect tax. Businesses are then responsible for reporting it to the government.
Is China exempt from VAT?
VAT is only applicable in mainland China. The Special Administrative Regions of Hong Kong and Macau are excluded.
What is the VAT threshold in China?
China has raised its VAT registration threshold from 1 January 2019 from CNY30,000 to CNY100,000 for small businesses. The measure is temporary for the next two years.
Do I need to register for VAT in China?
Individuals must VAT register if their taxable supplies exceed RMB20,000 per month.
What is VAT tax in China?
China VAT. The Chinese Value Added Tax regime is one of the most progressive and broadest consumption tax regimes in world. Many goods and services are subject to 16% VAT, but there are four rates in total, as well as nil-rating.
How does the VAT work in China?
China’s VAT is paid at each step in the supply chain as a given product moves toward the end user. For example, in the production and export of toys, VAT is paid during production, when it is sold to a distributor, and when it is resold to a trading company for export.
What is the tax rate in China?
The Individual Income Tax in China (commonly abbreviated IIT) is administered on a progressive tax system with tax rates ranging from 3 to 45 percent.
What is import VAT in China?
From April 1, 2019, all goods imported into China are subject to the value added tax (VAT) of either nine percent or 13 percent. The nine percent tax is available for certain goods that fall mainly within the categories of agricultural and utility items, while the 13 percent tax applies to other goods subject to the VAT.