(Yicai) Aug. 12 -- China has issued a draft version of the regulations for implementing the country’s new value-added tax law and opened it to public comment.

The draft regulations were released yesterday by the Ministry of Finance and the State Taxation Administration. The feedback period is open until Sept. 10.

VAT is China's main tax category, generating about CNY6.57 trillion (USD914.2 billion) last year and accounting for 38 percent of fiscal revenue. The updated version of the VAT Law was reviewed and approved last December, and it is expected to come into effect on Jan. 1 next year.

The regulations follow the provisions of the VAT Law, align with the current VAT system, and taking into account the practical needs for collection and administration, set out specific rules. They consist of 57 articles divided into six sections, covering general provisions, tax rates, taxable amounts, tax incentives, tax administration, and supplementary provisions.

In the general provisions, the regulations detail and clarify the VAT Law’s rules on taxpayers, the scope of taxation, and other elements, while in the section on tax rates, they clarify the relevant scope for export goods, cross-border sales of services, and intangible assets.

Together with the VAT Law and VAT policy documents, the regulations form the legal framework of China's VAT system and serve as an important guarantee for implementing the VAT Law, Xinhua News Agency reported, citing Liang Ji, director of the Research Center for Government Revenues at the Chinese Academy of Fiscal Sciences.

The regulations are an important supporting measure for the VAT Law, Li Xuhong, vice-president of Beijing National Accounting Institute, told Daily Economic News. A stable tax system will better boost investor confidence and stabilise investment expectations, which is important for attracting investment and ensuring the sustainability of business operations, he said.

Li also said the regulations clarify the scope of taxation and the scope of input-tax deduction, refine deduction standards, simplify deduction procedures, and streamline the chain of VAT deductions. The measures will help promote the division of labor and the free flow of factors, improve the efficiency of resource allocation, and help build a unified national market, he added.

Editor: Futura Costaglione