PracticeConsultingCustoms splits VAT hairs over crackers

Customs splits VAT hairs over crackers

Customs & Excise has celebrated the Chinese New Year with an effort to clarify the confusing VAT rules relating to prawn crackers.

The rules remain complex, however, depending on what the popular Chinese snack is made of and how it is served.

According to a Customs briefing, crackers which are made of potatoes or cereal crops, packaged up and sold without further preparation are standard rated. Those made from tapioca – a root crop – are zero-rated.

But any crackers sold as part of a hot restaurant meal are standard-rated.

The status of crackers in takeaway meals will depend on the type of cracker.

Beijing led celebrations last month (above) that ushered in the Year of the Rabbit – predicted to bring peace, hope and stability. But the country’s painful transition to capitalism is still blighted by false accounting and corruption, which authorities are trying to reduce with a large-scale auditing campaign.

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