The Pilot Scheme Of Business Tax To VAT Is Released.

The pilot scheme for the business tax to VAT was released yesterday.

The Ministry of Finance and the State Administration of Taxation issued the "business tax reform VAT pilot scheme" and the relevant policies and regulations of the Shanghai pilot, announced that the pportation industry applied 11% of the tax rate, and the modern service industry applied 6% of the tax rate.

From next January 1st, we will launch a pilot project in Shanghai.

Two new low tax rates

It is understood that the main content of the pilot reform is to set up 11% and 6% two tax rates on the basis of the current VAT 17% and 13% two tax rates. The pport industry applies 11% tax rates, and the modern service industry, such as R & D and technology services, cultural and creative, logistics assistance and certification consulting, applies 6% tax rates. The tax exemption policy of the sales tax enjoyed by the pilot taxpayers, such as technology pfer, is adjusted to tax exemption or levy on value added tax; the current VAT general taxpayer purchases the services to the pilot taxpayers, which can deduct the input tax; the business tax revenue from the original pilot area is still vested in the pilot area after VAT is added.

Tax reform will be promoted nationwide

The head of the Ministry of Finance and the State Administration of Taxation said that China will strive to gradually promote the reform of "business tax to VAT" during the "12th Five-Year" period.

Shanghai's service industry is complete and its radiation is obvious. Choosing Shanghai to pilot it first is conducive to accumulating experience for the full implementation of the reform.

Overall tax burden or a slight decrease.

Tax effect

Q: has there been a great change in VAT revenue after the levy?

A: through the arrangement of tax rates and preferential policies, the total tax burden of the pilot industry will not increase or drop slightly.

In terms of industries that currently collect value added tax, whether in Shanghai or elsewhere, the input tax payable on taxable services to the pilot taxpayers can be deducted and the tax burden will drop correspondingly.

The four rate is pitional arrangement.

Tax rate setting

Q: Why did the reform pilot increase the tax rate of 11% and 6%? Two?

Answer: according to the actual tax burden of business tax in pilot industry, the value-added tax rate of pportation industry is basically between 11%-15%, and the modern service industry is basically between 6%-10%.

In order to increase the overall tax burden of the pilot industry, the 11% and 6% low tax rates of two stalls were selected for the pilot projects, respectively, for pportation and modern service industries.

It is a necessary pitional arrangement to adjust from the current two stalls to four stalls, and the tax rate will be reduced in due course.