| Abstract | The VAT regime in China was introduced on 1 January 1994. Prior to that, all foreign business entities operating in China were generally subject to a turnover tax known as the Consolidated Industrial & Commercial Tax (CICT). Domestic enterprises were subject to other kinds of turnover taxes. Under the new regime, all PRC enterprises, both foreign and domestic alike, are subject to the same turnover taxes, namely VAT, business tax and consumption tax. Of these three taxes, VAT has the widest scope. It covers the sale of all goods (except real estate properties) and utilities such as electricity, together with the provision of repairs services and goods processing services. It is also likely to provide the largest source of tax revenue to the PRC government. |
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