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Tax Alert: China Requires Listed Firms to Charge VAT on Transferred Assets

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Created 06/11/2009 - 10:23am

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Tax Alert: China Requires Listed Firms to Charge VAT on Transferred Assets

by CFO Innovation Staff, 06 November 2009
topics:
Tax [5]
tags:
Circular Guo Shui Han [2009] No. 585 [6] KPMG [7] VAT [8]
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China has issued Circular Guo Shui Han [2009] No. 585 that makes a listed firm liable to charge VAT on assets transferred to its holding company in an asset restructuring where it remains its listed company status.

 

According to KPMG China [9], such a transfer does not qualify for VAT exemption, which would be available to transfer of property rights over an enterprise as a whole. KPMG adds that the holding company is also liable to charge VAT if it reinvests such assets in other companies.

 

Compliance risks due to regulatory uncertainties will be decreased as a result of the Circular, says KPMG.

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CFO Innovation Staff
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