Since the real estate, construction, financial service and consumer services sectors have transformed from Business Tax (“BT”) to Value Added Tax (“VAT”) starting from 1 May 2016, the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) released a series of follow-up circulars to clarify the relevant industry specific issues and tax collection and administration issues. We have shared our detailed observations in the previous China Tax and Business News Flash.
Recently, the SAT released the <Public Notice on further Clarifying the Tax Collection and Administration Matters under the B2V Transformation Pilot Program (the “B2V Reform”)> (SAT Public Notice No.11) (PN11) as well as its official interpretation, further clarifying the relevant industry and tax collection and administration issues. The more important issues include VAT treatment on special activities in the construction sector, VAT treatment on bank card cross-institutional fund settlement service in the financial service sector and the good news to all taxpayers which relates to the extension of the deduction period of input VAT invoices issued on or after 1 July 2017. In this News Flash, we will share with you our interpretation on the above key issues in details, analyse the impact on taxpayers as well as our observations and views.
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