China’s top leadership reaffirms the taxation reform blueprint
The 18th Central Committee of the Communist Party of China (CPC) held its third Plenary Session (the Third Plenum) from 9 to 12 November 2013 in Beijing. At the Third Plenum, the Decision on Several Major Issues Concerning the Comprehensive Deepening of Reform (the Decision) was adopted by the Committee. The Decision sets out the general plan for a package of political and economic reforms in China to be achieved by 2020 as well as the objectives and guidelines of these reforms.
The fiscal and taxation reforms in the Decision are generally consistent with those outlined in the 12th Five-Year Plan1 from two years ago. Some of the reforms have already been under pilot implementation, such as the Business Tax (BT) to Value-added Tax (VAT) Transformation Pilot Programme (B2V Transformation Pilot Programme) and the pilot run of Property Tax collection in Shanghai and Chongqing, while some are still under discussion, like the introduction of Environmental Tax and the optimisation of Consumption Tax (CT). The Decision also commits to strengthen the legislation of tax incentives and improve the relevant administration. Relevant taxpayers, companies and investors should keep close attention to the taxation reforms highlighted in the Third Plenum and plan ahead.
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