- Draft VAT implementation regulations released by China’s Ministry of Finance and State Taxation Administration on 11 August 2025
- Public consultation open until 10 September 2025
- Regulations maintain continuity with current VAT system but introduce key refinements
- New compliance requirements for allocating input VAT and anti-avoidance rules
- Cross-border transactions focus on determining “consumed in China”
- Services deemed supplied in China if consumed domestically or related to Chinese goods, real estate, or resources
- New concepts introduced for place of consumption, requiring further guidance
- Foreign taxpayers leasing property in China must appoint a domestic agent for VAT obligations
- Unclear if requirement extends to other taxable services or intangible assets
- Deemed sales rules exclude free-of-charge services from taxable transactions
- Uncertainty remains about the application of anti-avoidance rules to gratuitous services
Source: taxathand.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.
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