China’s State Council executive meeting determined actions to deepen the value-added tax (VAT) reform. The VAT further cut will be effective from May 1st, 2018. Major VAT tax cuts will include:
Reduction from 17% to 16% in manufacturing industries;
Reduction from 11% to 10% in transportation, construction, agricultural and telecommunication sectors.
The five-year tax rule is an important and misunderstood factor in determining a tax strategy for expatriates living in China. Foreign nationals who reside in China for more than five years can be considered Chinese tax residents and therefore liable with tax authorities on their global income.
