China Issues Draft Consultation on Changes to VAT Law
China recently issued a draft consultation paper for new value-added tax legislation that aims to “elevate” the treatment of VAT rules to a legislative format and implement internationally recognized VAT guidelines, KPMG said in a Dec. 2 post. The “consultation process” for the VAT legislation is open until Dec. 26, and will eventually be considered and likely approved by China’s National People’s Congress in early 2020, the post said.
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The introduction of new VAT rules is also “intended to overcome the different systems for goods and for services” within China and is expected to be “a more robust system of rule of law,” KPMG said. While China will make more significant changes once the new VAT rules become law, the country has issued certain “variations” to its VATs that are expected, including different treatments of small-sale VAT taxpayers, the scope of taxable activities, mixed sales, jurisdictional nexus, deemed sales and more, KPMG said.