January 12 2023

STA Updates Preferential VAT Policies for Small-scale VAT Taxpayers

Source: Announcement of the State Taxation Administration

The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") jointly released on January 9, 2023 the Announcement of the Policies for Exemption and Reduction of Valued-added Tax ("VAT") on Small-scale VAT Taxpayers.

From January 1, 2023 to December 31, 2023, small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (inclusive) will be exempted from VAT. During the same period, small-scale VAT taxpayers can pay VAT at a rate of 1 percent on sales subject to a 3 percent VAT levy, and prepay VAT at a rate of 1 percent on items subject to a pre-levy VAT rate of 3 percent, according to the Announcement.

The STA released on the same day the Announcement of the Matters concerning the Tax Collection and Administration under the Policies for Exemption and Reduction of VAT on Small-scale VAT Taxpayers to clarify the rules on the tax collection and administration.