China’s VAT system a major source of risk and opportunity – EY T Magazine

China’s VAT system a major source of risk and opportunity

It is a myth that China’s VAT is simply a cash flow item with no P&L impact and a limited risk profile. On closer examination, VAT in China is far from neutral with sticking VAT, blocked input credits, cascading costs and other unique technical matters that can result in significant VAT-related costs hitting the bottom line. A number of recent examples include both foreign and Chinese companies having to make large provisions, or even restate financial statements, due to VAT-related errors or fraud.

Read more: China’s VAT system a major source of risk and opportunity – Ernst & Young T Magazine.

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