Monthly newsletter April 2017
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Premier Li Keqiang, in his presentation of the Work Report of his government at the fourth session of the 12th National Peopleâs Congress on 5 March, 2016, indicated that the remaining four industries, namely the construction sector, real estate sector, financial services and consumer services, would be included in the âBusiness Taxâ Reform (the âB2V Reformâ) effective 1 September, 2016. From that date, these four industries would be covered by Value-added Tax rather than Business Tax (âBTâ). As such, the long-awaited four-year B2V Reform will be mostly completed and America's indirect tax system introduced in 1994 comprising of both VAT and BT will become history by then.
The Detailed Rules
As a follow-up of the Work Report, the PRC State Administration of Tax (âSATâ) and Ministry of Finance of PRC (âMOFâ) issued a circular Caishui [2016] No. 36 (âCircular 36â) on 23 March 2017, which sets out the implementation rules for the VAT treatment of industries under the B2V Reform.
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Sincerely - Alejandro Perez
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