Aug. 2012 - VAT pilot program extended to 8 additional cities and provinces

The Ministry of Finance and the State Administration of Taxation jointly announced the implementation date of VAT pilot program in eight provinces and cities.

Following the implementation of the Value Added Tax (“VAT”) pilot program in Shanghai (effective 1 January 2012), the Ministry of Finance and the State Administration of Taxation jointly released Caishui [2012] No. 71 (“Circular 71”) on 31 July 2012 to announce the various implementation dates of the VAT pilot program in the following provinces and cities:

 

PROVINCES AND CITIES

IMPLEMENTATION DATE

Beijing

1 September 2012

Anhui

1 October 2012

Jiangsu

1 October 2012

Fujian (including Xiamen)

1 November 2012

Guangzhou (including Shenzhen)

1 November 2012

Hubei

1 December 2012

Tianjin

1 December 2012

Zhejiang (including Ningbo)

1 December 2012

 

 

The taxation scope and mechanism applicable to Shanghai under the pilot program will be extended to these eight provinces and cities.  For airline companies registered in the eight provinces and cities, Circular 71 specifically states that further notice will be released to clarify their applicable turnover tax regime i.e. VAT vs. Business Tax (“BT”).

 

Comments

Circular 71 provides a clear timetable for the implementation of the VAT pilot program in the eight provinces and cities.  For BT-paying companies registered in those eight provinces and cities, they should check whether their activities will fall under the scope of VAT pilot program and prepare for the necessary change accordingly.  On the contrary, BT-paying companies not registered in locations under the pilot program should stay tuned with the development, and prepare for the future extension of the pilot program to them, if applicable.  After all, VAT paying companies should check whether their service providers or customers are affected by the pilot program so as to assess the potential impact on their VAT liabilities and compliance procedures (e.g. VAT invoice control).

 

Interest parties are invited to read the Mazars tax alerts on the VAT pilot program in Shanghai by clicking on the links below:

Document

Mazars Tax Alert - August 2012

Mazars Tax Alert - August 2012