China VAT withdrawn for small companies
The Chinese State Council announced yesterday that it will take small companies out of the China VAT net from 1 August 2013.
Approximately six million businesses with an annual turnover of below 20,000 yuan (€3,000) will no longer be required to be China VAT compliant. The move comes as the Chinese economy slows further, and the government looks for measures to underpin its target of 7%+ GDP growth for 2013. Other measures announced this week include improvements to the customs administration and clearance procedures to importers as China looks to rebalance its economy from exports to local consumption.
China started a programme in 2012 to reform its VAT system, and move towards the standard OECD model. It started in a number of provinces, and the China VAT roll out will go national on 1 August 2013.