China Sourcing: You Got 'VAT?

As the tens of thousands of global companies that face price increases from China in July will tell you, the VAT rebate change that started July 1 is a huge deal. But while the traffic jams caused in late June by companies racing to get their containers on the water before the export rebate change were significant (scroll down in the above link to see what I mean), few in the US that I've spoken with this week really understand how the Chinese VAT and the expert rebate programs actually work.

So where should you start your research to see how you might be impacted by the changes? A good primer which we managed to dig up in the office this week comes from PWC, who issued a report on the subject last September. And another more recent report on the current changes comes from E&Y. Both I strongly recommend checking out.

Stay tuned for continued coverage of the Chinese VAT situation today and next week on Spend Matters. I'm planning on offering my opinion, as well as that of a number of guest bloggers, about how the current situation will change China sourcing -- and by extension global sourcing -- in ways no one would have thought about only a month ago.

Jason Busch

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