Three major telecom operators flag impact from VAT change

China Telecom (0728), China Mobile (0941) and China Unicom (0762) said a change in value-added tax treatment for certain telecommunications services may have an impact on their revenue and profitability on Sunday. China Telecom reminded investors to exercise caution when dealing in its securities.

The companies said the VAT treatment will take effect from January 1, 2026, lifting the applicable tax rate to 9 percent from 6 percent, following notices jointly issued by the Ministry of Finance and the State Taxation Administration of the People's Republic of China.

Services affected include SMS and MMS, as well as internet broadband access services provided via wireline, mobile networks, satellites and the internet. These services were previously categorized as value-added telecommunications services and will be reclassified as basic telecommunications services.

Cynthia ZHONG