China’s New VAT Law: Key Changes, Business Impacts, and Future Tax Policy Developments

China introduced a new VAT law in December 2024, effective January 1, 2026, replacing decades-old provisional regulations.
The law retains most existing VAT rules but introduces changes affecting cross-border services, deemed sales, mixed sales, input VAT rights, and electronic invoicing.
Businesses must reassess operations and strategies, while tax advisers need to understand and interpret the new rules to guide clients.
Tax advice now requires deeper analysis of systemic impacts on compliance, business models, and costs, with a focus on industry specifics.
Upcoming potential changes include preferential VAT policies for small businesses and key sectors, and clarifications on VAT zero-rating/exemption, which could reduce costs and boost exports.

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.