• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/26/2013

China - VAT exemptions for exported services 

September 26:  Guidance issued by China’s State Administration of Taxation implements rules for value added tax (VAT) exemptions for exported services.

The guidance provided by Announcement 52 of 2013 (13 September 2013) implements the VAT exemptions for exported services, and generally mirrors the “place of supply” and zero-rating concessions for exported services used by other countries. The VAT exemption rules apply broadly to many cross-border service arrangements, including related-party service arrangements.

With the new guidance, procedural and administrative requirements are provided for taxpayers to follow with respect to VAT exemptions for exported services (as originally contained in Caishui [2011] 131 and later rewritten in Caishui [2013] 37).

The new implementation rules clarify matters such as whether taxpayers may self-assess eligibility for the exemptions or require review; and if so, what documentation or evidence is needed to demonstrate the conditions for exemption are satisfied.

In the absence of the implementation rules, some tax authorities in certain provinces have not allowed taxpayers to use exemptions from VAT for exported services.

Read a September 2013 report [PDF 322 KB] prepared by the KPMG member firm in China: VAT and exported services – implementation rules released

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