Core Viewpoint - The new VAT law and its implementation regulations, effective this year, expand the range of deductible items for businesses, particularly allowing for the deduction of input VAT on certain services used in production activities rather than solely for final consumption [3][4][5]. Group 1: Changes in VAT Regulations - The new VAT law allows input VAT on dining, daily services, and entertainment services to be deductible if they are not directly used for final consumption but rather for production activities [4][5]. - The phrase "directly used for consumption" has been added, indicating that only expenses related to final consumption are non-deductible, while those related to taxable transactions may be deductible [4][6]. Group 2: Implications for Businesses - This change reflects a shift from a blanket prohibition on deducting input VAT for certain services to a more nuanced approach, allowing deductions when these services are part of production processes [5][6]. - The adjustment aims to maintain the integrity of the VAT deduction chain, preventing double taxation on services that are integral to business operations [6][8]. Group 3: Historical Context and Future Outlook - The expansion of deductible input VAT has been a trend since the comprehensive implementation of VAT in 2016, with previous inclusions such as real estate and domestic passenger transport services [8]. - Future reforms are expected to further enhance the VAT deduction system, addressing the heavy tax burden on some businesses due to insufficient deductions, which could have a significant impact comparable to tax rate reductions [8].

Core Viewpoint - The new VAT law and its implementation regulations, effective this year, expand the scope of deductible input tax for businesses, allowing for a reduction in VAT payable as the allowable input tax increases [2][4]. Group 1: Changes in VAT Regulations - The VAT law now allows for the deduction of input tax on services directly used for consumption, such as dining, daily services, and entertainment, which were previously non-deductible [2][3]. - The phrase "directly used for consumption" has been added, indicating that only input tax related to services not used for production or taxable transactions can be deducted [3][5]. Group 2: Implications for Businesses - The adjustment in regulations aims to prevent the interruption of the deduction chain, ensuring that businesses are not subject to double taxation on services that are part of their production process [4][6]. - Businesses purchasing services for resale or as part of taxable services can now deduct the corresponding input tax, which is expected to lower their tax burden [5][6]. Group 3: Historical Context and Future Outlook - The expansion of deductible input tax has been a trend since the VAT reform began, with previous inclusions such as real estate and domestic passenger transport services [6]. - Future reforms are anticipated to further improve the VAT deduction system, addressing the heavy tax burden faced by some businesses due to insufficient deductions [6].

Core Viewpoint - The article discusses the tax rates applicable to various service sectors, including modern services and living services, highlighting the differences in VAT rates and exemptions for specific services [3][10]. Tax Rates for Living Services - The basic VAT rate for living services is 6% [3]. - Specific service categories and their VAT rates include: - Catering and accommodation: 6% [3] - Education and medical services: exempt from VAT [3] - Cultural and sports services: 6% [3] - Tourism services: 6%, with an option for differential taxation [3] - Entertainment services: 6% [3] - Daily resident services: 6%, with exemptions for marriage introduction and funeral services [3]. Tax Rates for Modern Services - The basic VAT rate for modern services is also 6% [3]. - The article provides a detailed breakdown of various service categories under modern services, although specific categories are not listed in the provided text [3]. Tax Policies for Affordable Housing - The article outlines tax policies related to the planning and construction of affordable housing, aimed at improving housing supply and addressing urban housing issues [10]. - Tax exemptions include: - Exemption from urban land use tax and stamp duty for affordable housing projects [11]. - Exemption from land value-added tax for certain transfers of old houses as affordable housing sources [11]. - Exemption from various administrative fees and government funds related to affordable housing projects [12]. Implementation Date - The tax policies regarding affordable housing will be effective from October 1, 2023 [13].