2016-05-04-KPMG_China-2016_亚太区间接税指南_60页_711kb

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Asia Pacific Indirect Tax Country Guide Summary (KPMG 2016)

Key Report Highlights

• Introduction: The Asia Pacific region is diverse in its indirect tax regimes, posing significant challenges for businesses seeking tax-efficient supply chains. KPMG highlights increased international focus on issues like VAT gap closure using big data, cross-border service taxation, reverse charge mechanisms, and simplified invoicing.

• China's VAT Reforms: China transitioned from a business tax (BT) system to a Value-Added Tax (VAT) system across various sectors as of May 2016. The VAT system features multiple rates (3%, 6%, 11%, 13%, and 17%), includes zero-rated and exempt supplies, and operates under a centralized registration framework. Challenges include a complex invoicing system, potential VAT gaps, and difficulties for foreign entities in recovery and compliance.

• Singapore: Singapore uses a Goods and Services Tax (GST) at a standard rate of 8% (lowered temporarily due to COVID-19) with zero-rated and exempt supplies. Registration thresholds are triggered by taxable turnover.

• Vietnam: Imposes a Value-Added Tax (VAT) at a standard rate, includes reduced rates, zero-rated exports, and specific exempt categories.

VAT/GST Trends in Asia Pacific

• Expansion of tax bases beyond goods and services to include digital assets and financial services.
• Move towards broader-based, single-rate VAT/GST systems.
• Cross-border implications with destination-based principles and reverse charge mechanisms.
• Convergence of traditional and digital economy taxation challenges, with BEPS influence.

**For detailed information about other countries listed (Australia, Cambodia, Fiji, India, Indonesia, Japan, Korea, Laos, Malaysia, Mongolia, Myanmar, New Zealand, Papua New Guinea, Philippines, Sri Lanka, Taiwan, and Thailand) please refer to the full KPMG report.