China implements new VAT rates from April 1, 2019

The PRC Ministry of Finance, the State Administration of Taxation and the General Administration of Customs have jointly issued, on March 20, 2019, the Announcement on “Deepening the policies related to the VAT reform.” The Announcement implements the decision to reform further the VAT policy taken during the annual legislative sessions held by the National People’s Congress and announced by the Premier Li Keqiang earlier this month.

According to the provisions, the VAT rates for general VAT taxpayers will be lowered from 16% to 13% and from 10% to 9%. Consequently, the highest export VAT refund rate, which grants a full recovery of the input VAT, will also be lowered to 13%. The revised VAT rates will be implemented from April 1, 2019, and represent the second reform involving the value-added tax in less than one year.

A table with the new VAT rates is available here.