Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 1/17/2013

China - VAT reform for construction, real estate sectors 

January 17:   With the value added tax (VAT) pilot program for the modern services and transportation sectors now implemented in many of China’s major commercial centers, attention now turns to those industries that have yet to transition from the business tax to VAT—including the construction and real estate sectors.

There are few industries that evoke as widespread analysis and scrutiny of tax policies in China as the construction and real estate sectors. The China “tax yearbook” for 2011 illustrates the significance of the construction and real estate sectors—i.e., business tax revenue from construction and real estate represented 51% of total business tax revenue in China.


Many issues that the construction and real estate sectors, tax authorities, and tax advisors may need to consider in relation to the potential conversion of the construction and real estate sectors from the business tax regime to a VAT system, however, are based on pure speculation because the Chinese tax authorities have not announced any details.


Read a January 2013 report prepared by the KPMG member firm in China: VAT reforms for the construction and real estate sectors




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