Notice of the State Council on the Return of Value-added Tax in a Fixed Amount from the Central Government to Local Governments

• Document Number：No. 71 [2016] of the State Council
• Area of Law： Taxation
• Level of Authority： Regulatory Documents of the State Council
• Date issued：12-11-2016
• Effective Date：12-11-2016
• Status： Effective
• Issuing Authority： State Council

Notice of the State Council on the Return of Value-added Tax in a Fixed Amount from the Central Government to Local Governments
(No. 71 [2016] of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
In order to further improve thetax sharing fiscal system, and implement the transitional plan for adjusting the distribution of the value-added tax (“VAT”) revenue between the central and local governments after the comprehensive promotion of the pilot program of replacing business tax with VAT, the State Council has decided to, as of 2016, adjust the measures for the return of VAT from the Central Government to local governments under the original system by changing the return of VAT determined when the reform of the tax sharing fiscal system was implemented in 1994 to the return of VAT at a fixed amount based on the amount in 2015 and no longer conduct incremental return or deduction for areas where VAT increases or decreases. The specific base amount of VAT to be returned shall be ratified by the Ministry of Finance.
State Council
December 11, 2016