China reduces VAT on soybean as part of wider tax cut

China will, from May 1, cut VAT rates to 10% from 11% on farm produce, the Chinese cabinet announced on Wednesday, a cut that will likely save crushers of imported soybeans $4-5/mt.

In addition to an 11% VAT charge, China levies a 3% tariff on imported soybeans.

The cut is part of a broader tax reduction package amounting to 400 billion yuan ($64 billion) and is meant to fuel economic growth.

"This round of tax cuts will apply to all manufacturing companies. All businesses registered in China, either joint ventures or completely foreign owned companies, will be treated equally," Premier Li said.

The latest VAT Reform takes total tax cuts in China since 2013 to 2.1 trillion yuan.