vat reforms-it-consulting-intercompany-services-slides-201205

VAT Reforms in China IT consulting advertising amp intercompany services

KPMG in China

Lachlan Wolfers and Roger Di

May 2012

Agenda

bull Setting the scene

bull How the VAT pilot program operates

bull Specific implications for businesses

bull Practical steps

bull Major risk areas or issues

bull Opportunities

bull How KPMG can help you

copy 2012 KPMG Advisory (China) Limited a wholly foreign owned enterprise in China and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (ldquoKPMG Internationalrdquo) a Swiss entity All rights reserved

2

Pre-reforms

Business Tax

Consumption Tax

VAT


3

Post-reforms

Business Tax

Consumption Tax

VAT

bull Asset Leasing bull Goods bull Transportation bull Modern Services


4

Indirect tax reforms

Expansion by scope likely in 2013 Financial Services

Real Estate amp Construction

Entertainment Post amp

Telecoms

Chongqing

Shenzhen

Shanghai

Jiangsu

Tianjin Beijing

2013 Jiangsu and Anhui

Beijing 1 Sept 2012

Shanghai 1 Jan 2012

1 Nov 2012

Fujian and Guangdong (including Shenzhen)

1 Dec 2012

2013 and after

Tianjin Zhejiang and Hubei

1 Oct 2012

The remaining cities and provinces in China

Beijing

Tibet

Jiangxi Fuj

ian

Tianjin

Anhui

Shanghai

Zhejiang

Fujian

Guangdong

Hubei

Jiangsu

Agenda






bull Opportunities



6

VAT reform decision matrix

VAT Liability

Place of supply

Services Registration

Concessions

Presenter
Presentation Notes
The role of the global VAT Director131313Business needs a decision about a new market How do you react Or significant reforms being implemented How do you manage from afar 1313(1)Current Inadequatedistortive legislation or practice which inhibits my organization industry or its future 131313(2)Business realities Everyday tax management issues Pricing Rate Characterization Valuation131313(3)Future by agenda Proposed structural or industry level changes which alter the tax burden or competitiveness of your organization industry131313(4)Risk management Binding rulings in 25 Member States Take advice in each country Take a view and hope to defend any challenge


7

VAT pilot scheme ndash industries amp rates

Industry VAT Rate

Leasing of tangible movable property

17

Transportation services

11

Research and development (RampD) and technical services

6

Information technology (IT) services

6

Cultural and creative services

6

Logistics and ancillary services

6

Certification and consulting services

6

Small scale VAT taxpayers

3


8

VAT pilot scheme ndash scope of services

RampD and technical services includes

RampD services technology transfer services technical consulting services energy contract management engineering reconnaissance and exploration services

Scope Definition

RampD services Research experiment and development of new technology new products new techniques or new materials and the related systems

Technology transfer services Transfer of the ownership or use right of patented or non-patented technologies

Technical consulting services Feasibility study services technology forecasting services special technology survey services analysis and evaluation report services and professional knowledge services for special technical projects

Energy contract management Feasibility study services technology forecasting services special technology survey services analysis and evaluation report services and professional knowledge services for special technical projects

Engineering reconnaissance and exploration services

Field surveys conducted for terrains geological structure underground resources conditions prior to mining and project constructions


9


IT services includes

production collection process storage transportation search and utilization of information via computers and communication networks and provision of such information services

including software services circuit design and testing services information system services and operational flow management services

Scope Definition

Software services Provision of software development consultation maintenance and testing services

Circuit design and testing services Provision of integrated electronic and circuit products design testing services and relevant technical support services

IT system services Provision of information system integration services network management services desktop management and maintenance services information system application services basic IT management platform integration services IT related basic infrastructure management services data centre hosting centre and security services

Operational flow management services

IT based business activities related to the provision of HR management services financial and economic management services financial payment services internal data analysis call centre services and e-commerce services


10


Cultural and creative services includes design services trademarks and copyrights transfer services intellectual property services

advertising services and convention and exhibition services

Scope Definition

Design services Projecting the plan program and idea through visual text and other forms including industrial design style design fashion design environmental design graphic design packaging design animation design exhibition design website design mechanical design engineering design and creative planning

Intellectual property services Dealing with intellectual property matters including agency registration verification evaluation certification consulting search services for patents trademarks copyrights software and integrated circuit design

Advertising services Propaganda and related services for goods business services cultural and sports programs notices announcements and other matters entrusted by the client through books newspapers magazines radio television film slides signs posters window display neon signs light boxes Internet and other various media

Convention and exhibition services Facilitating commodity circulations promotions shows business and trade discussions non-governmental exchanges enterprise communications and international exchanges


11


Certification and consulting services includes

certification services verification services and consulting services

Scope Definition

Certification services Activities where qualified professional institutions use detection inspection measurement techniques to prove that products services management systems comply with the relevant technical specifications and technical specifications in compliance with certain mandatory requirements or standards

Verification services Activities where qualified professional institutions assess the commissioning partys economic activities and relevant information and issue probative opinions including accounting taxation asset valuation lawyers real estate and land evaluation and construction costs reports

Consulting services Activities to provide information or recommendation on finance tax legal internal management operations and process management


12

RMB 5 million (US$800000) annual sales

income

Compulsory

Optional

Registration


13

Place of supply - domestic

Location of supplier Location of services VAT or BT

In a cityprovince subject to the VAT pilot program


VAT


Elsewhere in China BT but credit allowed against VAT payable (very limited application in practice)

Elsewhere in China In a cityprovince subject to the VAT pilot program

BT

Elsewhere in China Elsewhere in China BT

Rule of thumb If you paid BT previously and those same services are now within the scope of

the pilot program then you now pay VAT It does not matter where the customer is located in China


14

Place of supply - cross border

Location of supplier Location of recipient place of consumption

VAT treatment


Outside China Zero rated or exempt

Outside China In a cityprovince subject to the VAT pilot program

If no agent recipient may claim input VAT credit subject to documentary requirements

Outside China Services consumed wholly outside China

Not subject to VAT

Outside China Leased goods used entirely outside China

Not subject to VAT


15

Key VAT implications for cross border services

Exports

Imports

Services consumed wholly outside of China

bull foreign entities providing services to Chinese entities which are fully provided and consumed outside China

bull foreign entities leasing tangible goods to Chinese entities where the goods are entirely used outside China

Output VAT Creditable input VAT

Zero - rating No

Yes

Exempt No No


Agent or purchaser Withholding of VAT Yes if general VAT taxpayer


16

Exported Services ndash Circular 131

Industry VAT treatment

VAT zero-rating VAT exemption

RampD and technical services

bull RampD and design services provided to overseas entities

bull Engineering as well as exploration services with the related project or mineral resources located outside mainland China

bull Technology transfer technology consulting

energy management services (except where the object of the energy management contract is located in mainland China) provided to overseas entities

IT services bull Software services circuit design and testing services business process management services provided to overseas entities


17





bull Design services provided to overseas entities (except for design services in relation to immovable property located in mainland China)

bull Convention and exhibition services located outside mainland China

bull Trademark and copyright transfer services

intellectual property services provided to overseas entities

bull Advertising services where the related

advertisement is released outside mainland China


bull Certification verification and consulting services provided to overseas entities (except for services in relation to goods or immovable property located in mainland China)


18

Procedures for claiming zero rating for exported services

Announcement 13 applies to businesses that export international transportation services RampD services and design services under the VAT pilot program Business must be granted ldquoexempt credit refundrdquo (ECR) status before they can commence submitting VAT refund reports and applying for zero rated VAT refunds or credits They must also comply with the following

Service provided

Approval procedures

Zero rated VAT refund or credit documentation requirements

RampD services

bull Bank account permitlicense

bull Registration certificate of technology export contract

bull ECR Return Application bull Zero-rated Taxable Services (RampD Design Services) Tax-exempt Refund

Application Detail Tables (form yet to be released) bull Current period VAT Return bull Tax-exempt Refund Application Official Electronic Data bull The following original certificates

minus Registration Certificate of Technology Export Contract applicable to the RampD or design services provided to the foreign enterprise (copy only)

minus The RampD or design services contract pertaining to the zero-rated VAT services provided

minus Invoice for zero-rated services minus Detailed Breakdown of Revenues Received From Providing RampD and

Design Services provided to Foreign Entities (form yet to be released) minus Other documents capable of reflecting and certifying revenue

composition received in relation to the agreed RampD or Design service contracts

minus Other certificates as requested by the competent tax authorities

Design services


bull Registration Certificate of Technology Export Contract


19

Procedures for claiming exemption for services

The tax authorities in Shanghai have not yet published the documentation requirements for claiming exemption from VAT 1) Circular 111 only contemplates procedures being issued by the Ministry of Finance

State Administration of Taxation for zero rating not exemption 2) Some taxpayers are being asked to pay VAT on exported services with a refund to be

given when the procedures are published and satisfied 3) Other taxpayers are being asked to self-assess eligibility for exemption The Changning District Tax Bureau in Shanghai have issued procedures for taxpayers located in its boundaries Taxpayers must provide the following in order for the exported service to be exempt from VAT

the application form

the contract

foreign income transaction records

receipts and

any other requested documents


20

Other concessions

Concession VAT treatment Input VAT credits

Technology transfers by pilot taxpayers

Exempt from VAT No

Offshore outsourcing services by businesses registered in citiesprovinces subject to the VAT pilot program

Exempt from VAT No

Pipeline transportation services VAT levy first and refund later for VAT burden in excess of 3

Yes

Approved finance leases VAT levy first and refund later for VAT burden in excess of 3

Yes

Agenda






bull Opportunities



22

Implications for businesses - industry specific rules

General rule

Specific rule for taxpayers who previously paid BT on a net basis

Income VAT liability

VAT payable Output VAT ndash input VAT

Output VAT Gross basis Gross revenue x 6 VAT



Output VAT Net basis (Gross revenue ndash allowable deduction) (1 + VAT rate) x VAT rate


23

IT industry example

Beijing Co sells software products

bull VAT applies at rate of 17

bull refund where tax burden gt3 per Caishui [2011] 100

Beijing Co now generates input VAT credits from the payment of royalties

As a result of the VAT reforms Beijing Co

bull may generate additional input VAT credits

minus this reduces tax burden

minus this reduces the refund

bull therefore there is no real benefit from the VAT reforms


24

IT industry example - royalty

Royalty

Licence of IP rights

VAT withholding 6 Gross up for VAT

WHT on VAT-inclusive amount

Cash flow

VAT pilot program

Software Co

US Head Office

Service flow

Input VAT creditable


25

IT industry example ndash maintenance v repair

Sale of equipment ndash

17 VAT

bull Previously incentive to characterise maintenance as a service not a repair

bull Now is maintenance service subject to 6 VAT or 17 VAT

bull When does it matter

Customer VAT

pilot program IT Co

Provision of maintenance services


26

Advertising example - agency in a city subject to the VAT pilot program

Gross income

6 output VAT

Advertising publication fee

Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency

Advertising publisher

(egmedia)

Invoice flow



27

Advertising example - agency outside a city subject to the VAT pilot program

Gross income

5 BT


BT deduction for fee only or

fee + VAT

Cash flow

Customer Non-VAT pilot

program advertising

agency

VAT pilot program

advertising publisher

(egmedia)

Invoice flow



28

Intercompany support services example - imports

City subject to the VAT pilot

program

Other branches

Tax authority

Head Office

Mainland China Overseas

Issues Need to ensure service within the scope Gross up for VAT withholding Meet documentation requirements for claiming input VAT credit Interaction with transfer pricing


29

Consulting services example - exports


program

Other branches

Tax authority

Head Office


Issues Need to ensure service within the scope of the pilot program Service must not relate to goods or real estate in mainland China Comply with procedures for claiming exemption Transfer out input VAT Interaction with transfer pricing

Agenda






bull Opportunities



31

Practical steps - impact of VAT reforms on profitability

BT Regime VAT Regime

Sales Revenue ($) 100

BT payable 5 5 NA

VAT ndash output ($) NA

Costs of Sales($) 80

VAT - input($) NA

Profit($) 15

Ensure cost savings of

suppliers is passed on

Tip 1 Try to pass on VAT

costs to customers

Seek to pass on VAT to

customers

Maximise input VAT credits

15


32

VAT Ready

Sourcing of services

IT systems

Training

Exports imports of services

Insourcing v outsourcing

Staff travel amp entertainment

Consumer Demand changes

Intragroup services

Registration amp Invoicing

Pricing ACrsquos payable

ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings

Small scale taxpayers

VAT Ready

Supply chain


33

How do I implement reforms ndash timeline

bullVAT taxpayer registration bullInternal training for relevant functions bullFinancial impact study bullVAT invoice and reporting process design

Date of implementation

Month after implementation

Now

Now

Tax and IT advisory assistance

VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax

IT bullBusiness system review and upgrade bullFinancial and tax system review and upgrade bullLinkages with Golden Tax System

bullUse new financial and tax system bullImplement new VAT invoice and reporting process bullmonitor the working flow bullFollow up on new rules

bullReview contract terms ndash can VAT be passed on bullWhere VAT cannot be passed on can you renegotiate bullAmending standard contracts to allow for VAT pass on

bullAssess pricing implications bullReview current vendor status (assess their savings) bullCommunicate and negotiate with customers and vendors

Business

Legal

work TOGETHER

to get VAT READY

First

VAT return 1st ndash end of

month

Agenda






bull Opportunities



35

Contracts

If the contract is silent no VAT

can be on-charged to the purchaser


36

Major risks or issues ndash contracting and cost saving impacts

1) Existing contracts bull If the contract is entered into prior to the reforms and the price is inclusive of BT will supplier have to

absorb the VAT Or can the supplier pass on the VAT

bull Leases of tangible movable property entered into prior to the implementation of the VAT pilot program ndash remain subject to BT

bull If the contract allows for entitlement to pass on lsquoindirect taxesrsquo or lsquoturnover taxesrsquo will the supplier be able to pass on the VAT

2) New contracts bull If you are the supplier how do you ensure VAT can be recovered in addition to the contract price

bull If you are the purchaser

minus how do you ensure the supplier does not simply add on VAT to the price which already includes BT

minus how do you ensure the supplier passes on the benefit of the cost savings arising from the removal of BT and the availability of input VAT credits

minus how do you ensure the supplier provides you with a special VAT invoice before you pay the VAT


37

Major risks or issues ndash registration amp invoicing

1) Key registration and invoicing issues to consider bull Is my business registered as a general VAT taxpayer or does it need to register now

bull If not is my business turnover sufficient to register

bull Will my business be subject to a monitoring period

bull What equipment does my business need to purchase to issue special VAT invoices Do my staff know how to use it

bull What is the lead time for registering and obtaining approval and equipment for issuing special VAT invoices Will my business be ready for the implementation of the VAT pilot program

bull Will my business only deal with other businesses which are registered as general VAT taxpayers


38

Major risks or issues ndash IT systems

1) Key issues to consider bull Do my IT and accounting systems recognise VAT

bull What tax codes does my accounting system recognise

bull Output VAT codes - 0 (exempt) 6 (new VAT rate) 11 (new VAT rate) 13 (foodstuffs and other items) and 17 (general VAT rate)

bull Input VAT rates - 0 (ineligible for VAT credit) 3 (where obtain a special invoice issued by tax authorities for small scale taxpayers) 6 (new VAT rate) 7 (purchase of transportation services from small scale taxpayers by general VAT taxpayers)11 (new VAT rate) 13 (foodstuffs and other items) 17 (general VAT rate) export refund rates

bull How do my systems link in with the golden tax system


39

Major risks or issues ndash supply chain

1) Key supply chain issues to consider bull Consider the current legal structure ndash what aspects of that structure are superfluous How could things

be rationalised or improved

bull Assuming no cascading of BT what aspects of my supply chain can now be removed

bull Absent BT is my supply chain most effective from a trade and customs perspective

bull How does my renewed supply chain impact on transfer pricing

bull Does my supply chain model consider the concept of unbundling non-dutiable costs from my customs value such as commissions or service fees paid to buying agents for the sourcing of products


40

Major risks or issues ndash cash flow and training

1) Key cashflow impacts bull Can my business fund an increase in VAT on services (up from 3 or 5)

bull What are my payment terms for accounts receivable Do I pay VAT before I receive it

bull What terms does my business pay accounts payable Do I get a special VAT invoice at or before I pay the VAT component

bull Is there a net cashflow deficiency

bull When borrowing to fund major acquisitions will I be able to get short-term financing of VAT component

bull How do the VAT reforms impact on internal budgeting ndash ie VAT inclusive or VAT exclusive

2) Key training considerations bull Who in my organisation needs to know about these reforms

bull What about the impact on staff in the finance function Acrsquos receivable and acrsquos payable function

bull For foreign MNCs what about head office training

Agenda






bull Opportunities



42

Opportunities that the reforms present

Consider whether it is preferable to acquire

services from businesses subject to the VAT pilot

program (for which an input VAT credit may apply) in preference to acquiring

services from businesses in other parts of mainland

China (for which irrecoverable BT is likely to

apply)

This preference is only likely to apply for the period until the reforms are expanded

across mainland China

Deferring the purchase of fixed assets so as to qualify for input VAT credits on fixed assets purchased once the

reforms commence

Caution should be exercised before artificially terminating

existing contracts or purchase orders or returning

fixed assets recently acquired

Deferring the purchase of non-essential services to

ensure that any new services being acquired are

subject to VAT

This is especially true in the case of related party

services

Importantly though it may not be sufficient to simply defer payment if there is a

contract that provides for an earlier payment date


43

Implementation opportunities ndash practical tips from other countries

Significant tax reforms like this are a key

management issue not simply a tax issue

Need to start preparing now ndash this includes

taxpayers not subject to the pilot program -

the reforms are inevitable

Obtain a budget to prepare for the reforms

Put together a key team ndash project leader + key external advisers

Consider the impact on IT systems accounting systems and processes

pricing contracts consumer demand

cashflow management

Businesses who provide services are

likely to suffer increased strain on

cashflow

Financial services and real estate are often

problematic under VAT ndash hence left until later

Transition to a new system ndash always

produces winners and losers ndash the key to

being a winner is to be prepared

Agenda






bull Opportunities



45

How KPMG is assisting its clients

Preparation

bull lsquoVAT Preparersquo report

bull Financial impact assessment

bull Contract reviews

Implementation

bull Project management

bull Key supplier arrangements

bull Key customer arrangements

bull Preparation of standard procedures

bull Training

bull IT systems

Compliance

bull Preparation of VAT returns

bull Engagement with tax authorities

bull Application for VAT exemptions or zero rating for exported services

bull Apportionment of input VAT credits

bull Post-implementation health checks


46

Contact

Lachlan Wolfers Leader KPMG Centre of Excellence Indirect Taxes KPMG China +86 (21) 2212 3515 lachlanwolferskpmgcom


47

Contact

Roger Di Partner Tax KPMG China +86 (10) 8508 7512 rogerdikpmgcom

Thank you

Presentation by Lachlan Wolfers and Roger Di

copy 2012 KPMG Advisory (China) Limited a wholly foreign owned enterprise in China and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International) a Swiss entity All rights reserved

The KPMG name logo and ldquocutting through complexityrdquo are registered trademarks or trademarks of KPMG International

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity Although we endeavour to provide accurate and timely information there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future No one should act on such information without appropriate professional advice after a thorough examination of the particular situation

Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



2

Pre-reforms

Business Tax

Consumption Tax

VAT


3

Post-reforms

Business Tax

Consumption Tax

VAT



4





Telecoms

Chongqing

Shenzhen

Shanghai

Jiangsu

Tianjin Beijing


Beijing 1 Sept 2012

Shanghai 1 Jan 2012

1 Nov 2012


1 Dec 2012

2013 and after


1 Oct 2012


Beijing

Tibet

Jiangxi Fuj

ian

Tianjin

Anhui

Shanghai

Zhejiang

Fujian

Guangdong

Hubei

Jiangsu

Agenda






bull Opportunities



6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


2

Pre-reforms

Business Tax

Consumption Tax

VAT


3

Post-reforms

Business Tax

Consumption Tax

VAT



4





Telecoms

Chongqing

Shenzhen

Shanghai

Jiangsu

Tianjin Beijing


Beijing 1 Sept 2012

Shanghai 1 Jan 2012

1 Nov 2012


1 Dec 2012

2013 and after


1 Oct 2012


Beijing

Tibet

Jiangxi Fuj

ian

Tianjin

Anhui

Shanghai

Zhejiang

Fujian

Guangdong

Hubei

Jiangsu

Agenda






bull Opportunities



6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


3

Post-reforms

Business Tax

Consumption Tax

VAT



4





Telecoms

Chongqing

Shenzhen

Shanghai

Jiangsu

Tianjin Beijing


Beijing 1 Sept 2012

Shanghai 1 Jan 2012

1 Nov 2012


1 Dec 2012

2013 and after


1 Oct 2012


Beijing

Tibet

Jiangxi Fuj

ian

Tianjin

Anhui

Shanghai

Zhejiang

Fujian

Guangdong

Hubei

Jiangsu

Agenda






bull Opportunities



6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


4





Telecoms

Chongqing

Shenzhen

Shanghai

Jiangsu

Tianjin Beijing


Beijing 1 Sept 2012

Shanghai 1 Jan 2012

1 Nov 2012


1 Dec 2012

2013 and after


1 Oct 2012


Beijing

Tibet

Jiangxi Fuj

ian

Tianjin

Anhui

Shanghai

Zhejiang

Fujian

Guangdong

Hubei

Jiangsu

Agenda






bull Opportunities



6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


6


VAT Liability

Place of supply


Concessions

Presenter
Presentation Notes


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


7


Industry VAT Rate


17


11


6


6


6


6


6


3


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


8




Scope Definition








9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


9





Scope Definition







10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


10




Scope Definition






11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


11




Scope Definition





12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


12


income

Compulsory

Optional

Registration


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


13





VAT




BT





14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


14



VAT treatment






Not subject to VAT


Not subject to VAT


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


15


Exports

Imports





Zero - rating No

Yes

Exempt No No




16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


16











17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


17














18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


18



Service provided

Approval procedures


RampD services











Design services




19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


19






the contract


receipts and



20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


20

Other concessions



Exempt from VAT No


Exempt from VAT No


Yes


Yes

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


22


General rule









23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


23

IT industry example











24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


24


Royalty




Cash flow

VAT pilot program

Software Co

US Head Office

Service flow



25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


25



17 VAT




Customer VAT

pilot program IT Co



26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


26


Gross income

6 output VAT


Input VAT or

Revenue deduction

Cash flow

Customer

VAT pilot program

advertising agency


(egmedia)

Invoice flow



27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


27


Gross income

5 BT



fee + VAT

Cash flow


program advertising

agency

VAT pilot program


(egmedia)

Invoice flow



28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


28



program

Other branches

Tax authority

Head Office




29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


29



program

Other branches

Tax authority

Head Office



Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


31




BT payable 5 5 NA



VAT - input($) NA

Profit($) 15




costs to customers


customers


15


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


32

VAT Ready


IT systems

Training





Intragroup services



ACrsquos receivable

Contracts

Cashflow Supplier

Cost savings


VAT Ready

Supply chain


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


33





Now

Now


VAT effective on

1st of the month

First VAT filing

15th of following

month

Finance and Tax





Business

Legal

work TOGETHER

to get VAT READY

First


month

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


35

Contracts




36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


36












37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


37









38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


38








39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


39









40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


40











Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


42







apply)




reforms commence






subject to VAT


services




43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


43











cashflow management



cashflow






Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Agenda






bull Opportunities



45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


45


Preparation




Implementation





bull Training

bull IT systems

Compliance







46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


46

Contact



47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50


47

Contact


Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50

Thank you





Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50




Slide Number 1

Agenda

Pre-reforms

Post-reforms


Agenda







Slide Number 13








Other concessions

Agenda


IT industry example

Slide Number 25

Slide Number 26

Slide Number 27

Slide Number 28



Agenda


Slide Number 33


Agenda

Contracts






Agenda



Agenda


Slide Number 47

Slide Number 48

Thank you

Slide Number 50