VAT Tax Rate Adjustment


On April 4, the Ministry of Finance of the People's Republic of China issued a notice on the adjustment of the value-added tax rate.

In order to improve the value-added tax system, the following policy on adjusting the value-added tax rate is hereby notified as follows:

1.Taxpayers who have VAT taxable sales or imported goods, originally applied 17% and 11% tax rate, the tax rate was adjusted to 16%, 10% respectively.

2.If the taxpayer purchases agricultural products, the 11% deduction rate is originally applied, and the deduction rate is adjusted to 10%.

3.For export goods that originally applied a 17% tax rate and the export tax rebate rate was 17%, the export tax rebate rate was adjusted to 16%. For export goods and cross-border taxable activities that originally applied an 11% tax rate and the export tax rebate rate was 11%, the export tax rebate rate was adjusted to 10%.


4.For cross-border taxable activities covered by article 4 of the fourth article on goods and sales of foreign trade enterprises before July 31, 2018, which have been subject to VAT at the pre-adjustment tax rate upon purchase, the export tax rebate rate before the adjustment is implemented. When the value of value-added tax has been levied at the adjusted tax rate at the time of purchase, the adjusted export tax rebate rate will be enforced. The cross-border taxable conduct of Article 4 of the goods and sales covered by Article 4 of the production enterprise that was exported before July 31, 2018 shall be subject to the export tax rebate rate before adjustment.

5.This notice is implemented from May 1, 2018

In other words, from May 1st, May 2018, three deepening VAT reform measures will be implemented to reduce the level of taxation, standardize the value-added tax for small-scale taxpayers, and refund the tax deductions for some enterprises. The tax burden exceeds 400 billion yuan. Among them, the value-added tax rate in the manufacturing industry and other industries was reduced from 17% to 16%, and the value-added tax rate for goods such as transportation, construction, basic telecommunications services, and agricultural products, etc., was reduced from 11% to 10%, and it is expected to decrease throughout the year. Taxes 240 billion yuan.