China’s VAT Small-Scale Exemption
The Ministry of Finance (MOF) and the State Taxation Administration (STA) have jointly released the Announcement on Clarifying the Value-added Tax Reduction and Exemption Policy for Small-scale Value-added Taxpayers and Other Policies (the "Announcement"). The STA subsequently issued the Announcement on Relevant Tax Collection and Administration Matters Concerning the Value-added Tax Reduction and Exemption Policy for Small-scale Value-added Taxpayers and Other Policies. According to the Announcement, from January 1, 2023 to December 31, 2023, small-scale value-added taxpayers with monthly sales amount below CNY100,000 (inclusive) will be exempted from value-added tax (VAT). The Announcement also stipulates that, from January 1, 2023 to December 31, 2023, small-scale VAT taxpayers whose taxable sales revenues shall be subject to 3% levy rate shall be eligible for a reduced rate of 1%; for items subject to prepayment of VAT at the rate of 3%, the prepayment will be made at a reduced rate of 1%.