China’s proposed VAT reforms, open for public comment until September 10, 2025, introduce significant changes to the crediting of input VAT. The new rules restrict credits for large assets over RMB 5 million, disallow input VAT on loan-related costs, and make input VAT on non-taxable activities non-creditable. These changes require companies, especially those with large assets and cross-border operations, to implement new tracking and reconciliation systems. Additionally, the introduction of a General Anti-Avoidance Rule (GAAR) gives tax authorities broader power to challenge transactions. Overall, the reforms aim to tighten VAT credits, impose new reporting obligations, and align China’s tax system with international standards.
Source: fiscal-requirements.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.
Latest Posts in "China"
- China Lowers Luxury Car Tax Threshold to CNY 900,000, Expanding Tax Scope from July 2025
- China Revises VAT Rebate Policy 2025: Full Refunds for Key Industries, Partial for Others
- China Clarifies Tax Reporting Rules for Digital Platforms, Effective October 1, 2023
- France Cracks Down on Chinese E-Commerce Giants with Fines and Regulations
- China Releases Draft VAT Implementation Regulations for 2026 Law
