B2V reform of the real estate and construction sectors is just around the corner
At the press conference for the third session of the 12th National People’s Congress (NPC) held on 6 March 2015, the Minister of Finance, Mr. Lou Jiwei, mentioned that the Business Tax (BT) to Value Added Tax (VAT) Reform (the “B2V reform”) should be completed within this year in accordance with the plan. In other words, indirect tax for the consumer services, financial services, real estate and construction sector will all be converted from BT to VAT, among which the most difficult one is the conversion of immovable properties from BT to VAT. As the pillar of China’s economy, the B2V reform of the real estate and construction sectors will have widespread impacts. These sectors will face various challenges including business arrangements, accounting treatments, upstream and downstream administration, system improvement, etc. As such, real estate and construction enterprises should prepare themselves for the upcoming VAT era.
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