- China has started a public consultation on a new VAT law and regulations
- The VAT Law will be effective from January 1, 2026
- Draft regulation aims for consistent application and enforcement
- Clarifies taxable items and domestic consumption for services and intangibles
- Zero VAT rate for specific cross-border services and intangibles consumed outside China
- Detailed rules for VAT rates in mixed transactions
- Specifies valid deduction vouchers and input VAT treatment
- Excess input VAT can be carried forward or refunded
- Taxpayers must state sales and VAT amounts on invoices
- Rules for red-letter invoices and cancellations included
- Overseas entities renting property in China must appoint a local tax agent
- Exemptions for agriculture, medical services, education, and welfare retained
- Authorities can introduce further incentives
- Anti-avoidance measures disqualify improper use of exemptions
- Coordination between tax and government bodies emphasized
- Public consultation open until September 10, 2025
- Law and regulations effective January 1, 2026
Source: globalvatcompliance.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.
