China - VAT refund available to software developers
02-02-2012

China

VAT incentives have been recently introduced in China in relation to the sale of software products. Guidance note has been issued in Circular (Circular 100) to clarify the application and calculation of VAT incentives in relation to software sales that applies with effect from 1 January 2011, retrospectively.

The incentives are applicable to China’s software and semi-conductor industries. General taxpayers are liable to charge VAT at 17% on the sale of software products developed by them. Software products are defined as information processing systems and include computer software products, information systems and embedded software products. The general taxpayers are eligible for an immediate VAT refund if the VAT amount payable exceeds 3% of the sale amount.

Should you require more detail information on the criteria to be met to apply for VAT refund on software products in China or need assistance with calculation of VAT refund please do not hesitate to contact your local Meridian office or email info@meridianglobalservices.com.