Flash: Update on Indirect Tax Reform in China

Tax Insights

Complexities and ambiguities around China's current indirect tax system, coupled with an increased number of intricate and sophisticated transactions resulting from a more globalised economy, have led the Chinese Government to consider an overhaul of its indirect tax system. Consequently, indirect tax reform was incorporated into the State's 12th Five-year Plan and was discussed in July 2011 by the Minister of Finance. On October 26, 2011, Premier Wen Jibao officially announced that a Pilot Program will be introduced to assess the impact of the new policies before they are fully implemented country-wide. The program will be piloted in Shanghai.

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