On February 3, a rumor about a tax increase on Internet value-added services circulated on the Internet. Affected by the tax increase rumors and other factors, the stock prices of Tencent Holdings (00700.HK) and other stocks fell sharply for a time, and then the decline narrowed. Several senior tax experts told China Business News that with the implementation of the Value-Added Tax Law and Implementation Regulations from this year, the Ministry of Finance and the State Administration of Taxation recently announced a series of supporting regulations, including an increase in the value-added tax rate from 6% to 9% for Internet broadband access services of operators such as China Mobile and China Unicom.
This has also caused some of the above-mentioned people to speculate whether the tax rate applicable to the core business of Internet companies such as Tencent will also be increased. However, according to the relevant VAT regulations disclosed so far, the aforementioned tax rate remains at 6% without any change. Therefore, the "tax increase" of VAT is a rumor.
It is understood that in terms of value-added tax collection for Tencent and other core businesses, they mainly include the provision of value-added telecommunications services and the sale of intangible assets, and the applicable tax rate for both is 6%.
Recently, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Matters Concerning the Specific Scope of Value-Added Tax Collection" (hereinafter referred to as the "Announcement"), which adjusted the definition of value-added telecommunications services applicable to the 6% tax rate, but it has no impact on the above-mentioned businesses such as Tencent.
The "Announcement" clarifies that value-added telecommunications services refer to the use of fixed networks, mobile networks, satellites, Internet, and cable TV networks to provide electronic data and information transmission and application services (excluding mobile phone traffic services), Internet access services (excluding broadband access services), satellite TV signal landing transfer services and other business activities. Compared with previous regulations, the provision of SMS and MMS services, mobile phone data services, and broadband access services has been mainly deleted.