Chinese VAT reforms went national in August 2013 in respect of transport and broadcast services. The first VAT reform pilot started in 2012 in Shanghai and was then rolled out to 11 other provinces.
Some more services will become subject to VAT and these will attract a VAT rate of 11% – compared to the current 3% and 5% Business Tax rates.
The first new sector which is scheduled to be subject to VAT in 2014 will be telecoms. It is anticipated that a VAT rate of 11% will be introduced and this will apply to phone charges, data, roaming etc.
Following telecoms, the real estate and property construction sectors will then be subject to VAT and the new rate of 11% will be charged.
