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Indirect Taxation Of Cross-Border Services In China: (Partial) Switch To Destination-Based Taxation, Wei Cui

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In early November 2008, China's State Council approved a major overhaul of the country's VAT: starting in 2009, registered VAT payers are allowed to claim input credit for VAT paid on purchases of equipment and other non-real-property fixed assets. The change marks a decisive abandonment of China's previous esoteric "production-type" VAT (which disallowed input tax credit for fixed asset purchases) in favour of the conventional consumption-type VAT, and a giant step in the rationalization of the coun­try's tax structure. It also promises to accelerate the pace of VAT reform, the next major stage of which is widely regarded as expanding …