On 2 August 2012, the Ministry of Finance (“MoF”) and State Administration of Taxation (“SAT”) jointly issued the Notice on the Implementation of the VAT Pilot Reform in Beijng and Other 7 Regions of China (CaiShui [2012] No. 71) (“Circular 71”), setting out the pilot industries, pilot regions, implication date and the applicable tax policies etc. We below highlighted the salient points of Circular 71.
- 1. Pilot industries
- transportation industry
- six modern service industries
- 2. Eight pilot regions
Beijing, Tianjin, Jiangsu, Anhui, Zhejiang (including Ningbo), Fujian (including Xiamen), Hubei, Guangdong (including Shenzhen)
- 3. Implication Date
According to Circular 71, the 8 pilot regions shall perform the following preparation work as of 1 August 2012 to ensure the smooth implementation of the pilot program: identification and training of the pilot taxpayers, debugging of the tax collection equipment and system, installation of the tax invoice control system, as well as the issuance of the tax invoice etc.
The precise date of the VAT Pilot Reform for the 8 regions is as follows:
- Beijing –1 September 2012
- Jiangsu and Anhui – 1 October 2012
- Fujian and Guangdong – 1 November 2012
- Tianjin, Zhejiang and Hubei – 1 December 2012
- 4. Pilot Circularsapplicable to the 8 pilot regions
| Official Reference No. of the Pilot Circulars | Key features of the Pilot circulars |
| Caishui [2011] No.111 (Circular 111) | Circular 111 and its three appendixes set out the basic rules governing the Shanghai VAT reform pilot
|
| Caishui [ 2011] No.131 (Circular 131) | Circular 131 sets out the VAT exemption and VAT zero-rating rules for specific provision of services which will be treated as “exportation of services” |
| Caishui [2011] No. 132 | Circular 132 sets out the provisional measures for the VAT calculation and payment method applicable to specific VAT pilot taxpayer with headquarters based in Shanghai but operating across different regions |
| Caishui [2011] No.133 (Circular 133) | Circular 133 sets out supplementary VAT rules to address specific VAT matters such as the VAT treatment for the used fixed assets, etc. |
| Caishui [2012] No.53 (Circular 53) | Circular 53 sets out specific rules for international transportation services, animation and comics services, shipping agency services and operating lease |
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