Managing VAT effectively in time of rapid change

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Managing VAT effectively in time of rapid change - Presentation

EY Indirect Tax Publications

There is a common misperception that value-added tax (VAT) in China is a neutral “pass through” tax that does not directly affect a company’s financial position. China collects a significant portion of its overall tax revenue from VAT and that means companies are large net payers of VAT instead of neutral collectors / remitters. The VAT costs borne by businesses can be considerable but based on our experience are “hidden” in the accounting figures (e.g., there is no one single account or line in the P&L that directly shows “VAT costs”) and rarely completely understood by companies.

China’s government has been considering undertaking a comprehensive VAT reform for the last few years. VAT and business tax (BT) currently account for over 50% of the China government’s tax revenue collection and adjusting such an important system needs to be carefully studied and monitored. As a result, the Shanghai VAT Pilot has been introduced since 1 January 2012 to test the outcomes of a revised VAT regime. It has been reported that more VAT pilot programs will be launched in the near future to other cities and possibly including additional “in-scope” services.

The rapid regulatory changes to China’s VAT regime, coupled with the lack of proactive or strategic management of VAT operations by companies, could lead to significant VAT costs and missed opportunities. New regulations are also creating chances for companies to streamline VAT operations and take advantage of special rules to recover lost VAT. However, this is not easy and due to numerous accounting, invoicing and reporting requirements, China’s VAT system could be considered one of the most complex systems in the world.

Based on our experience, many companies, including the “old” VAT taxpayers and the “new” VAT Pilot taxpayers, are surprised at the total value of VAT their organizations are managing and the extent of VAT costs and inefficiencies being incurred. The material size of the VAT pool, essentially cash, running through the organization and quantum of direct and indirect VAT costs being incurred warrant dedicated efforts to manage VAT cost efficiently.

We invite you to join EY’s team of Indirect Tax professionals to learn more about recent and upcoming VAT regulatory developments; VAT costs, risks and opportunities; as well as how to strengthen the strategic management of your VAT.

LocationDate and TimeLanguageVenue
Shenzhen16 April
09:00 – 12:00 (Morning session)
Unit 2003-2005, 20/F,
China Resources Building,
5001 Shennan Dong Road,
Shenzhen, China
Dalian16 April
09:00 – 12:00(Morning session)
Unit D,10/F,
International Finance Tower,
15&17 Renmin Road,
Zhongshan District,
Dalian, China
Tianjin17 April
09:00 – 12:00(Morning session)
MandarinTianjin Nikko Hotel
No.189 Nanjing Road,
Heping District,
Tianjin, China
Hong Kong17 April
09:00 – 12:00(Morning session)
22/F, CITIC Tower,
1 Tim Mei Avenue,
Central, Hong Kong
Guangzhou18 April
09:00 – 12:00(Morning session)
18th Floor,
EY Tower,
No13 Zhujiang East Road,
Tianhe District,
Guangzhou, China
Suzhou19 April
09:00 – 12:00(Morning session)
Suite 1208,
Century Financial Tower,
1 Suhua Road,
Suzhou Industrial Park,
Suzhou, China
Chengdu19 April
09:00 – 12:00(Morning session)
17/F, The Office Tower,
Chengdu Shangri-La Centre, Block B, 9 Binjiang Dong Road,
Chengdu, China
Nanjing20 April
09:00 – 12:00(Morning session)
MandarinNanjing Westin Hotel
No.201 Zhong Yang Road,
Nanjing, Jiangsu, China
Chongqing20 April
09:00 – 12:00(Morning session)
MandarinSheraton Chongqing Hotel
European Ballroom II,
No. 78, Nan Bin Road,
Nanan District,
Chongqing, China
Shanghai*23 April
09:00 – 12:00(Morning session)
Shanghai World Financial Center,
43 level, 100 Century Avenue,
Pudong New Area,
Shanghai, China
23 April
14:00 – 17:00(Afternoon session)
Beijing*24 April
09:00 – 12:00(Morning session)
Level 21,
EY Tower,
Oriental Plaza,
1 East Changan Ave. Dongcheng District,
Beijing, China
24 April
14:00 – 17:00(Afternoon session)
Xiamen24 April
09:00 – 12:00(Morning session)
MandarinPan Pacific Xiamen Hotel
19 Hubin Bei Road,
Fujian, China
* Please note there will be two seminars in Shanghai and Beijing with each to be run in a different language


Morning sessionAfternoon sessionAgenda 
08:45 – 09:0013:45 – 14:00Registration and welcome note
09:00 – 10:0014:00 – 15:00

Update on significant VAT regulatory developments

  • Lesson learned from Shanghai VAT Pilot experience
  • EY China VAT survey results
  • Future VAT Pilot roll-out and planned overall VAT reforms
  • How should businesses prepare for the VAT Pilot and future VAT reform
10:00 – 10:2015:00 – 15:20Tea break and indirect tax survey
10:20 – 11:2015:20 – 16:20

Effective VAT management

  • Discuss VAT accounting and VAT process
  • VAT reconciliation – what to do and why
  • Using technology to assess your VAT risk and opportunities
  • How to effectively manage China VAT
11:20 – 12:0016:20 – 17:00Question and answer

Who should attend

  • CFOs
  • Tax directors
  • Financial controllers
  • Accounting staff
  • Purchasing directors
  • Legal professionals
  • Indirect tax professionals
  • Those interested in China’s VAT system