China’s Tax Governance Enters New Phase with Enactment of VAT Law

Key Takeaways

• The new law consolidates decades-old interim rules and seeks to make the tax environment more transparent.
• Accompanying regulations clarify many of the details, but certain ambiguities and the potential for uneven enforcement remain.
• Targeted adjustments to the VAT base and tighter enforcement are expected to play a key role in boosting fiscal revenue and curbing overcapacity.