Recently, three departments, including the Ministry of Finance ("MOF"), have jointly distributed the Announcement on Policies for Deepening the Value-added Tax Reform (the "Announcement"), effective from April 1, 2019.
The Announcement reads that: 1. The value-added tax (VAT) rate will be adjusted downward to 13 percent for general VAT taxpayers (taxpayers) that previously pay VAT at the 16-percent rate for their taxable sales or imported goods, and to 9 percent for those previously subject to the 10-percent rate; 2. The previous 10-percent deduction rate on agricultural products bought by taxpayers will be lowered to nine percent, and the 10-percent deduction rate could be used to compute the amount of input VAT for the agricultural products bought by taxpayers for the production or the entrusted processing of goods taxed at the 13-percent rate; 3. The export rebate rate will be adjusted to be 13 percent for exported goods or services formerly subject to the 16-percent VAT rate and the 16-percent export rebate rate, and to be nine percent for exported goods or taxable cross-border activities that are subject to the 10-percent VAT rate and the 10-percent export rebate rate in the past; 4. Goods bought by overseas visitors, on which the VAT could be refunded when they depart from China, will be subject to the 11-percent rebate rate, if previously taxed for the VAT purpose at the 13 percent, or the eight-percent rebate rate, if previously taxed at nine percent.