VAT changes favour Chinese firms
17/11/2008
China’s premier, Wen Jiabao, has approved a State Council decision to reform VAT policies throughout China. The reform will affect all industries.
The changes mean that from January 1, 2009, companies will be able to apply for a refund of VAT on purchases of new equipment, but existing VAT concessions on imported equipment will be removed, as will the VAT exemption that applies at the moment to companies that have overseas investment.
The government has calculated that these steps will reduce the tax burden on Chinese businesses next year by around $18 billion.
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