BusinessEasy has been qualified as one of the pilot entities in China’s tax reform scheme on switching from Business Tax to VAT in Shanghai.

As required by the State Council, Shanghai officially launched the pilot scheme on switching from business tax to VAT in the transportation and certain modern service industries on January 1, 2012.

 

On November 16, 2011, Ministry of Finance (MOF) and the State Administration of Taxation (SAT), after approved by the State Council, co-issued the Pilot Scheme on Switching from Business Tax to VAT, and printed and distributed three other supportive documents. To promote this reform successfully, Shanghai issued the implementation measures for the transitional fiscal support policy featured by the "company's honest application, fiscal support by category and timely appropriation of fund".

 

 This pilot scheme has the main contents as follows: based on two current VAT tax rates like 17% and 13%, two low tax rates like 11% and 6% are provided as well. Specifically, 11% applies to transportation industry while 6% is adopted by such modern service sectors as R&D and technical service, cultural and creative industry, logistic and supportive service, and visa consulting service. The business tax reduction and exemption policy, which used to be enjoyed by the pilot tax payers' technological transfers, will be replaced by VAT exemption or refunding on tax payment. The current VAT's ordinary tax payers, which purchase services from pilot tax payers, may have input tax withheld. Besides, the applicable policy on balance taxing of business tax shall remain valid within the period of pilot work, but the income whose business tax is levied in the pilot area shall have its VAT collected in the same area. To date, 120,000 enterprises have been involved in the scope of pilot scheme (including about 35,000 general tax payers and 85,000 small-scale tax payers).

 

As the leader of the IT equipments lease industry in China, BusinessEasy has been qualified as one of the pilot entities. That means from now on BusinessEasy will be able to issue VAT special invoice on rental to clients with certification of VAT’s ordinary tax payer. Such scheme will take the clients much cost-saving and take BusinessEasy great development opportunity.