|January 15, 2013|
Previously published on January 2013
On November 16, 2011, the Ministry of Finance (“MoF”) and the State Administration of Taxation (“SAT”) jointly released the Notice on Promulgation of the “Pilot Scheme for Replacing Business Tax with Value-Added Tax” (“Circular 110”) to pave the way of replacing Business Tax (“BT”) with Value Added Tax (“VAT”) for the transportation, technology, creative, logistics, authentication and consulting, and movable property leasing industries. The VAT reform was launched by a pilot program in Shanghai. Circular Cai Shui  No.71 (“Circular 71”) dated July 31, 2012 expanded the VAT pilot program to Beijing, Tianjin, Jiangsu, Zhejiang (including Ningbo), Anhui, Fujian (including Xiamen), Hubei, Guangdong (including Shenzhen) (the “Expanded Locations; Shanghai and the Expanded Locations are referred to jointly as the “Pilot Locations”) between August 1, 2012 and December 31, 2012. In Circular 71, the MoF and the SAT also confirmed that the pilot program rules applicable in each of the Expanded Locations will be the same as in Shanghai.