The Chinese economy has been slowing in recent years. As part of a 2 trillion RMB package the Chinese government seeks to reduce costs, especially for businesses affected by the tariff dispute with the US.
According to the announcement made by the government on March 5, China’s VAT rates change as follows:
– The 16 percent VAT rate, which applies to the manufacturing sector, will be lowered to 13 percent;
– The 10 percent rate, which applies to construction and transport, will be lowered to nine percent; and
– The six percent rate, which applies to services, will remain the same, but more deductions for the bracket will be introduced.
The new VAT rates came into force on April 1, 2019