Getting ready for the VAT reform Go back »
2013-07-25 | Beijing
On July 24th, the European Chamber held an afternoon seminar on the changes and implications the VAT reform will bring to businesses.
Mr Zhang Zhihui from MOF introduced the background and future directions of the BT-VAT pilot reform (coming into effect on August 1st) and gave a summary of the key changes brought about by Circular 37. According to the rough timeline given by MOF, the VAT reform will be implemented nationwide by end of 2015. Minister Lou from MOF estimated that the abolishment of tax deduction for real estate companies would bring about an impact worth of 900 billion RMB. The reform is particularly challenging for companies operating in multiple locations in China. To stay prepared, companies should start to review their service contracts and check with their clients for possibilities for price negotiation. They are also encouraged to approach regional tax authorities to understand the local policies in depth.
Mr Kenneth Leung from Ernst & Young analyzed the implications the VAT reform will have on local and multinational companies and their counterparts, as well as sharing with the companies “tips” they may adopt to become better prepared. Ms Guo Min from Gide Loyrette provided case studies with regards to the impact of the reform on different types of companies and gave advice on how to structure tax clauses in contracts.
Source: European Union Chamber of Commerce
