China announces detailed rules on VAT reform

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China's financial and taxation authorities announced Thursday a set of detailed rules on VAT reform.

Starting from May 1, VAT of 5 percent will be levied on homes if they are resold less than two years after purchases, according to a joint statement from the Ministry of Finance and the State Administration of Taxation.

Those sold after the two-year window are exempt from the levy.

Currently, homes that are sold less than five years after they were purchased are subject to a 5 percent business tax.

As of April 8, a tariff, VAT and consumption tax will be applied to imported items sold by cross-border e-commerce companies, to support the healthy development of the industry, the statement said.

The current tax rate on most imported products sold by e-commerce firms is 10 percent.

A business tax-to-VAT pilot began in 2012 and has been gradually expanded. It had reduced the tax burden of enterprises, most of which are small companies, by 641.2 billion yuan by the end of 2015.

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