Value-added tax reform to save more than 500b yuan
The taxation burden of Chinese enterprises will be eased by an estimated more than 500 billion yuan ($77.2 billion) after the wider implementation of a pilot value-added tax reform.
Four business sectors — construction, real estate, finance, and consumer service — will be included in the reform of business tax to value-added tax from May 1, according to decisions made during the executive meeting of the State Council, China’s Cabinet.
The extension of
the tax-to-VAT is aimed to reduce companies’ tax burdens and support the development of modern service and manufacturing industries, according to a news release on the meeting, which was presided over by Premier Li Keqiang.
According to the release, the price of new real estate purchases may be included in companies’ cost of production for tax exemption. In the previous pilot project, machinery bought by companies was included in the cost of production.