On 5th March 2016 China’s Premier Li Keqiang announced at the opening ceremony of the National People’s Congress (NPC) the expansion of the scope of the Value Added Tax (VAT) to several key sectors with effect from 1st May 2016. On 23rd March 2016, the Ministry of Finance and the State Administration of Taxation jointly announced the Circular Caishui (2016) No. 36 to introduce the implementation rules in relation to the pilot VAT Reform. This means that VAT will finally replace Business Tax to apply to all sectors and industries in China, aiming to mitigate double taxation under the dual-taxation system, reduce tax burden and optimise PRC tax regime.

AirPlus China was included in the scope of the pilot VAT reform and subject to VAT from 1st May 2016. On 8 June 2016, we successfully completed the transition to VAT billing system and the changes made to the invoicing process.

Within a short period of two months, we communicated and worked closely with airlines, travel management service providers as well as other partners, including inviting numerous corporate clients to discussion sessions and seminars to understand their needs with the implementation of VAT. After many trials and tests, we successfully upgraded our eBilling system. Now, corporate clients are able to have a comprehensive overview of their VAT amount, d eductible and non-deductible items as well as other vital information through the new AirPlus eBilling.

To ensure that the AirPlus eBilling data is complete and accurate, we are manually checking and amending our corporate clients' current eBilling. As we are still in the integration phase of the VAT cutover and are working towards improving and accelerating the cutover process, we greatly appreciate any feedback and suggestions from customers and partners.

Here once again, we like to take this opportunity to thank all our corporate clients and partners for their support and understanding in the VAT implementation.