China has adjusted the VAT rate comprehensively

On April 4, 2018, the Ministry of Finance and the State Administration of Taxation issued “The notice on the adjustment of the VAT rate” (Taxation(2018)32), which has fully adjusted the VAT rate and will be implemented 

from May 1, 2018. The specific contents are as follows:

1. Taxpayers sell VAT taxable goods or import goods shall apply tax rate, those applicable to 17% and 11% tax rates were adjusted to 16% and 10% respectively.

2. For taxpayers who purchase agricultural products, the deduction rate of 11% shall be adjusted to 10%.

3. Taxpayers purchased agricultural products that are used for production and sales, manufacturing consignment with a tax rate of 16%, the input tax shall be calculated according to the deduction rate of 12%.

4. For export goods with the original 17% tax rate and the export tax rebate rate of 17%, the export tax rebate rate shall be adjusted to 16%. For export goods and cross-border taxable activities that used to apply 11% tax rate and 11% tax rebate rate, the export tax rebate rate shall be adjusted to 10%.

5. For the foreign trade enterprises’ goods involved in Article 4 export before July 31, 2018, and crossborder behaviors involved in Article 4 occur before July 31, 2018, VAT has been levied at the rate before the adjustment, the export rebate rate before the adjustment shall be implemented; if VAT has been levied at the adjusted rate of tax upon purchase, the adjusted export rebate rate shall be implemented. Production enterprises’ goods involved in Article 4 export before July 31,2018, and cross-border behaviors involved in Article 4 occur before July 31, 2018 shall implement export rebate tax rate before adjustment.