Value-added tax: usually includes all aspects of the production, circulation or consumption process. It is a neutral tax based on the value-added or price difference. Theoretically, it includes various agricultural industry fields (plantation, forestry and animal husbandry), mining, manufacturing, construction, transportation and business services, etc., or by raw material procurement, production and manufacturing, wholesale, retail and consumption. The specific collection content is as follows:

General scope: including sales (including import) of goods and provision of processing and repair services.

Special items:

1) Cargo futures (including commodity futures and precious metal futures);

2) Bank sales of gold and silver;

3) The pawn industry’s business of selling pawned items;

4) The consignment industry’s business of selling consigned items;

5) The production, allocation and postal department of philatelic products The business of selling philatelic products by other entities and individuals.

Special acts are deemed to be sales:

1) handing over goods to others for sale;

2) selling goods on behalf of others;

3) Transfer goods from one place to another (except in the same county or city);

4) Use self-produced or entrusted processing goods for non-taxable items;

5) Use self-produced, entrusted processing or purchased goods as investments in other units;

6) Distribute self-produced, entrusted processing or purchased goods to shareholders or investors;

7) Use self-produced or entrusted-processed goods for employee welfare or personal consumption;

8) Give self-produced, entrusted-processed or purchased goods to others for free.

Extended information:

Value-added tax has become one of the most important types of taxes in China. Value-added tax revenue accounts for more than 60% of all tax revenues in China, making it the largest tax type. Value-added tax is collected by the State Taxation Bureau. 50% of the tax revenue is central fiscal revenue and 50% is local revenue. The value-added tax on the import link is collected by the customs, and all tax revenue is central fiscal revenue.

VAT rate: Starting from July 1, 2017, the VAT rate structure will be simplified and the 13% VAT rate will be cancelled. At present, the main tax rates applicable to general taxpayers are: 16%, 10%, 6%, 0%, etc.

The taxpayers of value-added tax: units and individuals that sell goods or provide processing, repair and repair services, and import goods within the territory of the People's Republic of China are taxpayers of value-added tax. Foreign-invested enterprises have become taxpayers of value-added tax since January 1, 1994.

Reference materials:

The "Interim Regulations of the People's Republic of China on Value-Added Tax" issued by the State Council

"The Ministry of Finance and the State Administration of Taxation" Detailed Implementation Rules for the Interim Regulations of the People's Republic of China on Value-Added Tax"

"Administrative Measures for the Recognition of General Taxpayer Qualifications for Value-Added Tax" issued by the State Administration of Taxation