The State Council of the People’s Republic of China announced on 10 April 2013, that the current VAT pilot programme will be extended nationwide starting 1 August 2013.
The current VAT pilot programme applies to the transportation sector and certain modern service industries located in nine cities and provinces in China, i.e., Shanghai, Beijing, Tianjin, Guangdong, Fujian, Hubei, Jiangsu, Anhui and Zhejiang.
The expanded VAT pilot programme will also include the film and broadcasting industry starting 1 August 2013. However, the timeline for other industries in joining the pilot programme remains uncertain. According to the new announcement, the railway transportation and express delivery service industries will join the VAT pilot programme when, according to the State Council announcement, “the time becomes appropriate”.
According to news reports, VAT reform is expected to be completed within China’s Twelfth Five-Year Plan, meaning that VAT may completely replace business tax by the end of 2015.