China's Ministry of Finance has increased the threshold for collecting value-added tax (VAT) and business tax in order to support the development of micro and small enterprises, as well as to reduce their tax burden.
The Ministry has revised the "Provisional Regulations of the PRC VAT Rules" and "Provisional Regulations on Business Tax Rules", with effect from November 1, 2011.
Under the "Provisional Regulations of the PRC VAT Rules", the Ministry has amended Article 37 para (2). The new threshold for collecting VAT on sales of goods and taxable services has been increased to monthly sales value of 5,000-20,000 yuan, while the threshold for VAT on sales value per day is 300-500 yuan.
Earlier, the threshold for VAT on sales of goods was on monthly sales value of 2000-5000 yuan. Similarly, the threshold for VAT on sales of taxable services was on monthly sales value of 1500-3000 yuan, and for VAT on sales value per day was 150-200 yuan.
Under the "Provisional Regulations on Business Tax Rules", the Finance Ministry has amended Article 103 para (3). After the revision, the threshold provisions of business tax rate for those who pay tax on schedule is monthly turnover of 5000-20000 yuan, and for those who pay tax on a daily basis, the daily turnover is 300-500 yuan.
Prior to the amendment, the business tax threshold for those who paid tax on schedule was monthly turnover of 1000-5000 yuan, and for those who paid tax on a daily basis, it was collected on a daily turnover of 100 yuan.
Fibre2fashion News Desk - China
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