China Tax/Business News Flash

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May 2014, Issue 9

B2V reform next up for the telecommunications sector

As expected, telecommunications services is the next sector participating in China’s Business Tax (BT) to Value Added Tax (VAT) reform (B2V reform). According to the new circular Caishui [2014] No.43 (Circular 43), effective from 1 June 2014, telecommunications services will be subject to VAT, with basic services at the VAT rate of 11% and value-added services at the VAT rate of 6%. Circular 43 also sets out the respective scope of telecommunications services that are exempt from VAT and taxpayers that may opt for the simplified tax calculation method.

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