With the intensification of reform, China has undergone a number of tax reforms, two of which have been large. The first was in the 1990s, which saw the first steps taken in establishing a modern tax regime in China and completion of the laying of the foundations for the modern tax systems in China. The second started at the beginning of the second millennium and is still in the process of continuing intensification and improvement.
The starting point of the current round of reforms was the amendment of the Law on the Levy and Administration of Taxes, followed by the promulgation of the Enterprise Income Tax Law and the Law on Vehicle and Vessel Taxes. There were also several revisions of the Individual Income Tax Law, as well as the announcement in 2014 of the replacement of business tax by value-added tax reform, which is to be completed in 2015.
Through these reform measures, China’s tax systems are heading in a modern, objective and improved direction. In the next 10 years, a relatively sound, law-based and objective tax regime will be established. With the transformation of the functions of the central government, the authorities that taxpayers will have the most contact with in future will be the tax authorities, and taxation will be a major matter jointly faced by both governments and taxpayers.
The new round of tax reforms in China is progressing intensively and being promoted rapidly. Indirect taxes will be reduced progressively and direct taxes will continuously increase. The levying of property tax is on the verge of commencing, and other reforms of the tax authorities are progressively being carried out, with the current State Administration of Taxation (SAT) and local tax office system being progressively adjusted.
Yu Zhe is a partner at AllBright Law Offices in Qingdao
14/F, Citigroup Tower
33 Hua Yuan Shi Qiao Road, Pudong New Area Shanghai 200120, China
Tel: +86 21 6105 9000
Fax: +86 21 6105 9100