On 24 March 2016, the Ministry of Finance (MoF) and the State Administration of Taxation (SAT) jointly released Caishui  No.36 <Notice on the Comprehensive Roll-out of the Business tax to Value Added Tax (B2V) Transformation Pilot Program (the “B2V Pilot Program”)> ( “Circular 36”). Appendix 4 of Circular 36 <Regulations on the Cross-border Taxable Activities eligible for VAT Zero-rating or Exemption> clarifies the VAT exemption policies for cross-border taxable activities of the newly included B2V industries and adjusts the scope of cross-border taxable activities that was previously included in the B2V Pilot Program. On 12 May, the SAT released Public Notice No.29 <Administrative Measures on VAT Exemption for Cross-border Taxable Services under the B2V Pilot Program (Trial)> ( “PN 29”), which clarifies the detailed implementation requirement for cross-border taxable activities and standardises the record-filing procedures for cross-border taxable activities eligible for VAT exemption. PN 29 shall take effect retrospectively from 1 May 2016 and the previous released Public Notice No.49, <Administrative Measures on VAT Exemption for Cross-border Services under the B2V Regime (Trial)> was abolished simultaneously. In this issue of our News Flash, we would like to introduce the new measures on cross-border taxable activities eligible for VAT exemption treatment and share our observations.
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