China Tax/Business News Flash 

The recent global financial crisis has brought unprecedentedly significant impact to the global economy.  As a response to current instability and challenges lying ahead to the domestic economy, the Chinese State Council has proactively come up with and announced on 9 November 2008 ten fiscal measures, collectively earmarked as "Economy Stimulation Plan" to combat the adversity brought / to be brought by the tumultuous international economic environment.  As reported, the overall new investments under this "Economy Stimulation Plan" could amount to RMB4 trillion (or US$586 billion) to be input by 2010.

VAT reform appears as one of the ten fiscal measures announced by the State Council.  The long-awaited and proposed transformation of the production-oriented VAT system to consumption-oriented VAT system ("Transformation") is now confirmed and will play a vital role in the "Economy Stimulation Plan".  Surrounding the Transformation, there are also other components in this round of VAT reform.
  
On 11 November 2008, the Chinese Ministry of Finance ("MOF") and State Administration of Taxation ("SAT") organised a press conference, and revealed the details of the VAT reform.  VAT reform is a part of the Turnover Tax reform.  Subsequently on 14 November, the Xinhua News Agency released the amended Provisional Regulations on VAT, Business Tax and Consumption Tax approved by the State Council.  In this Issue, we will discuss the new details in this round of VAT reform and in our next issue of News Flash, we will discuss the amendments to these regulations in details.
  
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Read more by downloading our China Tax/Business News Flash (Nov 2008, Issue 13) (pdf file, 99KB) for your reference.
 
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