VATupdate
VAT

VAT Rates in China (Mainland)

Quick overview

Standard Rate Reduced Rate Other Rates
13% 3, 5, 6 and 9%

The local name for VAT in China is Zeng Zhi Shui.

There are basically 5 VAT rates in China:

  • Standard VAT rate is 13%
  • Reduced VAT rate is 3%, 5%, 6% and 9%

Recent developments

For more information about (recent) rate change developments in China, please click HERE.

Standard rate: 13%

This rate applies for all transactions that take place in China, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).

Zero rate (0%)

.. applies various exemptions with a refund of tax paid at preceding stages (zero rates), such ..

Reduced rate: 3%

  • Certain taxable used goods
  • Consignment goods sold by consignment agencies
  • Certain goods sold by pawnbrokers
  • Specific duty-free items sold by duty-free shops
  • Certain electricity produced by qualified hydroelectric-generating businesses
  • Certain construction materials
  • Certain biological products
  • Tap water (rate applies if taxpayer chooses simplified computation method with no input tax recovery)
  • Certain concrete cement goods sold by general taxpayers
  • Non-academic education services
  • Interest income from agricultural loan provided by Agricultural Development Bank of China and its affiliates
  • Certain rare disease drugs (orphan drugs)

Reduced rate: 5%

  • Labor dispatching service
  • Human resource outsourcing service

Reduced rate: 6%

  • R&D and technology services
  • Information and technology services
  • Culture and creative services
  • Logistics supporting services
  • Authentication and consulting services
  • Radio, film and television services
  • Business supporting services
  • Other modern services
  • Value-added telecommunication services
  • Loan services
  • Direct financial services
  • Insurance services
  • Financial product trading
  • Cultural and sports services
  • Education and medical services
  • Tourism and entertainment services
  • Catering and accommodation services
  • Daily services
  • Other lifestyle services
  • Sales of intangible assets

Reduced rate: 9%

  • Agricultural products (including grains)
  • Tap water
  • Heating
  • Liquefied petroleum gas
  • Natural gas
  • Edible vegetable oil
  • Air conditioning
  • Hot water
  • Coal gas
  • Coal products for household use
  • Food-grade salt
  • Farm machinery
  • Fodder, pesticides
  • Agricultural film
  • Fertilizer
  • Methane gas
  • Dimethyl ether
  • Books
  • Newspapers
  • Magazines
  • Audiovisual products
  • Transportation services
  • Postal services
  • Basic telecommunication services
  • Construction services
  • Sales of immovable properties acquired or developed after 1 May 2016
  • Leasing of immovable properties acquired or developed after 1 May 2016
  • Transfer of land use right

To note:

  • Some goods and services taxable at the different rates, for small-scale taxpayers
  • Some goods and services are exempted without the right to VAT credit

A global VAT/GST rate overview can be found here (note this is a work in progress).

This post was last updated on August 10, 2021.

Sponsors:

Advertisements:

* click here if you have interesting news to share *