China to consolidate VAT rates for individual tax payers
The Ministry of Finance is expected to shortly announce that it will simplify the Chinese Value Added Tax rates for taxable persons.
Chinese VAT rate vary from 2% up to 17%. Currently, small enterprises may opt for a flat rate 3% Chinese VAT, but forfeit the right to deduct any input VAT suffered. Small businesses are manufactures with sales u pto Yan 500,000 per annum; or wholesalers of goods with sales up to Yan 800,000 per annum.
The State Administration of Taxation is now going to effectively extend the 3% rate to taxable persons from 1 July 2014.