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Reuters reported earlier that the VAT reform in Beijing and other cities outside of Shanghai has been postponed until October. See http://news.yahoo.com/china-delays-expanded-value-added-tax-until-oct-013129768–business.html
The online version of the Chinese “Global Times” reports that there are implementation issues in Shanghai:
In Shanghai’s pilot program, the VAT rate is 11 percent, higher than the 3 percent business tax, but companies are allowed to reclaim part of the VAT with their purchasing receipts.
However, for many of Shanghai First Food’s purchases of agricultural products, they do not get any receipts, so its logistics unit now pays 3 percent more tax than before, Xu said.
Several companies interviewed by the Global Times in May also complained that the VAT program had actually increased their tax burden.
Beijing Likely to Commence VAT Reform in August: “While there is still no official news confirming the approval of the pilot program by the State Counsel, it is likely that the pilot program will commence on August 1, with the VAT filing for services under the pilot program to start in September.”