ANNOUNCEMENT 12 Jun 2015
June 12th, 2015 - The Chinese government reorganised and expanded a VAT rebate scheme.
NUMBER OF INTERVENTIONS
PRC State Taxation Administration, June 12th, 2015. (财税〔2015〕78号 关于印发《资源综合利用产品和劳务增值税优惠目录》的通知)
In June 2015, the Chinese State Taxation Administration released Caishui 2015/78 (hereafter, 'Annnouncement'), which revoked several previous announcements (see related acts), while also consolidating them and expanding the scope of the scheme.
The VAT rebate scheme in question grants full or partial rebates on VAT to producers of certain products if they use over a specified minimum of recovered waste material as an input.
In China, VAT is paid by manufacturers, as opposed to consumers, hence a scheme such as this one effectively constitutes a subsidy for manufacturers in certain sectors.
The Announcement reorganises previously piecemeal directives into a 'catalogue' of products which are eligible for rebates, as well as expanding it.
The catalogue makes the scheme more structured than before and introduces some small changes to the requirements for certain products, however no products were removed. Below are enumerated the additions to the catalogue, compared to previous announcements.
The two figures in brackets first denote the required amount of recycled material to qualify for the VAT rebate, then the VAT rebate rate for that product.
Please see the original catalogue for full information.
The scheme has been investigated by the EU anti-subsidy commission as unfairly prioritising certain industries.
The changes made in the Announcement came into effect from July 1st, 2015.