Today China's VAT For The Real Economy Such As Manufacturing Industries Is Reduced From 16% To 13% 01 Apr 2019


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China Premier Li Keqiang In this year's "Government Work Report" proposed to reduce the Value Added Tax (VAT) for China's real economy such as manufacturing industries  from 16% to 13% . Recently, some Chinese coal companies said they have received notification from the State Administration of Taxation that the Value Added Tax rate for the coal industry will be reduced from 16% to 13%, and will be adjusted from April 1st, but the official documents have not yet been received. The value-added tax for transportation, construction, real estate and other industries will be adjusted from 10% to 9%, the original VAT rate of 6% will remain unchanged.  Coal, steel, non-ferrous metals and other industries can benefit from the overall reduction of the tax burden on the real economy. The news was also confirmed by the CHINA NATIONAL COAL ASSOCIATION (CNCA) and a number of Chinese securities companies. Since China raised the value-added tax rate for coal related products from 13% to 17% in 2009, the actual tax burden of the value-added tax in the coal industry has been much higher than the national average. After the VAT rate fell to 16% on May 1 last year, the drop of 3 percentage points this time is a major positive for the coal industry. Value-added tax is the “big head” of the tax burden of coal enterprises. According to a survey conducted by the CHINA NATIONAL COAL ASSOCIATION (CNCA) in 2015, the value-added tax accounted for more than 50% of the tax burden of coal enterprises. According to a survey conducted by the CHINA NATIONAL COAL ASSOCIATION (CNCA) in 2015, at the time of the tax rate of 17%, the actual tax burden of the value-added tax in the coal industry was around 12%, more than double the national average. On March 28 last year, the State Council executive meeting decided to reduce the VAT of manufacturing and other industries from 17% to 16% from May 1, and the coal industry is also among them. A large and old state-owned coal enterprise in the Northeast of china has calculated that, after the VAT is reduced, this company's the taxable business of the 2018 year can be reduced by 400 million yuan.

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