According to a notice from Ministry of Finance and the State of Administration of Taxation, from 1 August to 1 December 2012, VAT reform pilot will be expanded to 8 provinces/cities. Taxpayers in Beijing shall complete the transition by 1 September 2012.
Lee & Lee Associates Comments: The above notice clarifies the applicable tax rules and taxable services. For taxpayers, we recommended firstly identify, by studying the rules, whether the business is within the covered areas and then, analyze the impacts the reform may bring. This homework can prepare the enterprises for communicating with tax authority from the angel benefiting the enterprise’s interest and also generate the strategies to respond to either negative or positive effect, e.g. more tax or less tax shall be paid.
Relevant Rule: ‘Notice of the Ministry of Finance and the State Administration of Taxation on Issuing ‘the Pilot Practice of Levying Value Added Tax in Lieu of Business Tax in eight provinces (including municipalities) ’’ Cai Shui [2012], No. 71;
