What is the scope of the Chinese value-added tax (VAT)?

The value-added tax (VAT) is levied on both domestic and foreign enterprises in China on the transfer of taxable goods and services at each stage of the production process. The VAT is levied on sales by producers, wholesalers and retailers as well as at the retail level whereby goods and services are sold to the final consumers. Commercial activities known as "mixed sales activities" which involve the sale of goods and certain services may also attract both VAT as well as business tax liability.