The VAT rate for private hospitals is 6% for general taxpayers, 3% for small-scale taxpayers, and 1% during epidemics.
But there are preferences for engaging in medical care, such as:
According to the provisions of the Circular of the Ministry of Finance and the State Administration of Taxation on the Relevant Taxation Policies for Medical and Healthcare Institutions (Cai Shui [2000] No. 42):
(1) The income from medical services obtained by nonprofit medical institutions in accordance with the prices stipulated by the state is exempted from all taxes . Medical service refers to the business of medical service institutions in examining, diagnosing, treating, rehabilitating and providing preventive health care, midwifery and family planning services to patients, as well as the provision of medicines, medical materials and appliances, ambulances, ward accommodations and meals in connection with these services;
(2) For profit-making medical institutions that have obtained revenues that are directly used to improve medical and health conditions, the following preferential treatment is granted for three years from the date of obtaining the registration for practice registration, the following concessions shall be granted for a period of three years: the income derived from medical services shall be exempted from business tax.
(3) Health institutions such as disease control organizations and maternal and child health care institutions shall be exempted from all taxes on the income from health services (including the income from vaccination and the allocation and sale of vaccines) in accordance with the prices stipulated by the State.