China to combine VAT rates
China has indicated that it plans to reduce the number of VAT rates to simplify compliance. This is likely to mean the consolidation of the main 11% and 6% rates – although no details have been provided yet.
The current Chinese rates are:
- 11% Retail; entertainment; hotel; restaurants; catering services; real estate and construction, telephony calls; postal; transport and logistic.
- 6% Financial services and insurance; telephony and internet data; IT; technology; consulting.
- 3% Chinese National Education Tax
- 2% Chinese Local Education Taxes
- 7 % City Maintance & Construction
The above VAT rate replaced the old VAT and Business Tax regime between 2012 and 2016.
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