China’s New VAT Law: Formalization, Changes, and Uncertainties

• The VAT Law of the People’s Republic of China was promulgated on December 25, 2024, and will take effect on January 1, 2026.
• The VAT Law formalizes the existing VAT regime, largely maintaining the current level of tax burden.
• The scope of taxable transactions remains consistent with the current regime, including the sale of goods, provision of services, transfer of intangible or immovable properties, and importation of goods within China.
• The VAT Law integrates “processing, repair and maintenance services” into the general category of “services.”
• The VAT Law adopts a streamlined approach to defining taxable transactions, covering “what,” “how,” and “where” the transactions occur.
• The VAT Law removes the catch-all provision for non-taxable transactions.

Source: insightplus.bakermckenzie.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---