In 2010, an enterprise imported a piece of equipment which occurred damages. It requires someone from the foreign companies to go to China to repair. Question: whether the repair costs charged by this foreign company needed to be pay VAT?
"Provisional Regulations on VAT" article 1 provides: In PRC, sales of goods or provision of processing, repairs and replacement services and the importation of goods units and individuals as VAT, tax-payers should pay VAT in accordance with the Regulations.
Article 18: The units or individuals outside the PRC who provide taxable services in the territory, as the units does not have operating agency with its domestic agents withholding agents. No agent in the territory, the purchasers shall be the withholding agent.
Therefore, foreign enterprises in China which engages in processing or repair services, you need to pay VAT, if no operators or agents, payments of domestic enterprises withholding agents.