China lowered its value-added tax (VAT) rates and expanded the criteria for businesses to qualify as small-scale VAT taxpayers.
VAT tax reduced by 1% for imported wines
The adjustment of only 1% will bring the total taxes for imported wine, including import tariff, VAT and excise tax, down from the earlier 48.2% to 46.9%.
Countries such as Australia, Chile, Georgia and New Zealand, for instance, will further benefit from the move since import tariffs on wines from these countries have already been reduced and eliminated completely.
Expansion of criteria for small-scale VAT taxpayers
Moreover, China also increased the threshold for small-scale taxpayer status from CNY 800,000 for retail and wholesale, to CNY 5 million for all sectors, while allowing companies currently registered as general taxpayers to register as small-scale taxpayers within a year. This will allow more small-scale business to enjoy a lower VAT (small-scale status taxpayers pay a flat 3% VAT, while general taxpayers pay 17% VAT ).
This news is considered to be beneficial to the majority of Chinese wine importers. After all, the annual sales amount of most wine importers is under 5million.