On 16 December the State Administration of Taxation (“SAT”) issued the announcement on the recognition of the Normal VAT Taxpayer Status under the Pilot Scheme (i.e. the pilot program aimed to replace the Business Tax with the VAT).

The Announcement provides that pilot taxpayers with annual sales of taxable services of more than CNY 5 million prior to the implementation of the VAT pilot scheme shall apply to the competent national tax authorities for recognition as general VAT taxpayers. Taxpayers with annual sales of less than CNY 5 million may apply to the competent national tax authorities for recognition as Normal VAT taxpayers provided that they meet the relevant requirements provided by law. Taxpayers that provide pilot taxable services and have general VAT taxpayer status prior to the implementation of the pilot scheme do not need to apply for recognition again.

The Announcement is effective from January 1st, 2014.

 

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