China VAT Export Rebate Cuts: Impact on Sourcing&Trade Imbalances

July 02, 2007 | BY

clpstaff &clp articles

Many exports from China are subject to higher net value-added tax (VAT) costs under a notice effective from July 1 2007.

By Qingsong (Kevin) Wang and Peter Connors of Orrick, Herrington & Sutcliffe

The objectives of these changes include suppressing overheated export growth, thereby easing friction between China and its trade partners, and reducing the relative profitability of domestic industries that entail high energy and resource consumption and heavy pollution. The changes affect 2,831 types of products, which constitute about 37% of the total number of product classifications in the customs tariff code.

The notice, Cai Shui [2007] No. 90 (Circular 90), was jointly issued on June 19 2007 by the Ministry of Finance and the State Administration of Taxation.

This premium content is reserved for
China Law & Practice Subscribers.

  • A database of over 3,000 essential documents including key PRC legislation translated into English
  • A choice of newsletters to alert you to changes affecting your business including sector specific updates
  • Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
For enterprise-wide or corporate enquiries, please contact our experienced Sales Professionals at +44 (0)203 868 7546 or [email protected]