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China to Start Telecom VAT Trials in April

Tencent Tech, 3/06/14

According to draft legislation submitted by China's Ministry of Finance (MoF) to the National People's Congress (NPC) for deliberation yesterday, the MoF will implement telecom industry value-added tax (VAT) trials on April 1, switching telecom operators from a business tax to a value-added tax. The VAT trials will be expanded to other companies in the railway, postal, and telecom industries.

China's telecom operators currently pay a business tax rate of 3%. It is not clear what tax rate operators will ultimately pay under a VAT system, but according to reports, the rate will be approximately 11%, instead of the 6% that China's telecom operators had hoped for.

According to the State Council's plan, China will shift entirely to a VAT system in 2015, while doing away with business taxes completely.

Editor's Note: For more background on this topic, please see "Rumor: China's Telecom VAT Rate Initially Set at 11%" MD 6/17/13 issue.

Keywords: tax telecom wireless Ministry of Finance NPC trial

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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