- China’s State Council passed new VAT Law Implementation Regulations on December 19, 2025, which will take effect on January 1, 2026, forming a crucial part of the VAT legal framework.
- These Regulations aim to define taxpayers, taxable items, set tax rates, explain calculations, improve exemptions, and strengthen administration, including invoice rules and export tax refunds.
- Key features include maintaining stability by retaining most existing rules, clarifying VAT Law provisions with detailed interpretations, optimizing tax policy to align with international standards and ensure fairness, and updating administration measures to reduce compliance burdens.
Source Pagero
- China’s new VAT Law and implementation regulations will take effect on January 1, 2026, aiming to modernize and streamline tax compliance, align with international standards, and ease business burdens.
- The law expands the scope of taxable transactions, adopts the destination principle for services and intangibles, and narrows the definition of deemed sales, exempting free services.
- Certain activities, such as employee services for wages and administrative fees, are explicitly excluded from VAT, but business reorganizations remain taxable.
- The three-tier VAT rate structure (13%, 9%, 6%) is retained, with a unified simplified rate of 3% replacing the previous 5%.
- The law clarifies rules for mixed sales, taxable income calculation, and input VAT, making loan services creditable and reducing tax burdens for businesses.
Source: vatcalc.com
See also Recent significant developments, changes and reforms in China – VATupdate
Latest Posts in "China"
- Fujian Tax Bureau Announcement on Land Value-Added Tax Collection and Administration Matters
- Hong Kong POS and Receipt Requirements Overview
- Hong Kong Fiscal Requirements Overview
- China’s VAT Reform Pushes Multinationals Toward Real-Time Compliance
- China VAT Reform Accelerates Real-Time Global Compliance Shift
