New VAT general taxpayer registration rules, effective January 1, 2026

• Mandatory registration as a general VAT taxpayer for entities whose annual VAT taxable sales exceed the standard threshold for small-scale taxpayers—unless they fall into specific exemptions. [guangdong….tax.gov.cn], [news.10jqka.com.cn], [国家税务总局关于增值…记管理有关事项的公告]
• Exemptions:
  • Natural persons (individuals)
  • Non-enterprise units that infrequently conduct taxable activities and whose main operations are outside the VAT scope—these can choose to remain under the small-scale taxpayer status. [guangdong….tax.gov.cn], [news.10jqka.com.cn], [国家税务总局关于增值…记管理有关事项的公告]

Threshold Determination

• The annual VAT taxable sales are calculated based on the sum of VAT-liable sales in a continuous 12-month period or four quarters. [guangdong….tax.gov.cn], [news.10jqka.com.cn]
• Excluded from the calculation: occasional sales of intangible assets or real estate. [guangdong….tax.gov.cn], [news.10jqka.com.cn]

Registration Triggers & Deadlines

• 1. Automatic Conversion upon Exceeding Threshold
  • When cumulative VAT sales exceed the threshold, the entity must register in the next month’s return filing period.
  • The general taxpayer status is retroactive to the first day of the month when the threshold was exceeded. [guangdong….tax.gov.cn], [news.10jqka.com.cn]
• 2. Proactive Registration (Even if Below Threshold)
  • Entities with sound accounting systems and accurate VAT records may apply to become general taxpayers voluntarily.
  • Once registered, the status is effective from the first day of that period. [news.10jqka.com.cn], [国家税务总局关于增值…记管理有关事项的公告]
• 3. Adjustments from Corrections or Audits
  • If VAT sales are adjusted due to self-correction, internal risk checks, or audits and this pushes the entity’s cumulative sales beyond the threshold, they must register within 10 working days of the adjustment.
  • Registration is retroactive to the month the threshold was exceeded. [guangdong….tax.gov.cn], [news.10jqka.com.cn]
  • For adjustments covering 2025 or earlier, the earliest effective date for general taxpayer status is January 1, 2026. [guangdong….tax.gov.cn], [news.10jqka.com.cn]

Automatic Upgrading & Consequences for Non‑Compliance

• Failure to register on time results in automatic classification as a general taxpayer five working days after the deadline. [guangdong….tax.gov.cn], [news.10jqka.com.cn], [国家税务总局关于增值…记管理有关事项的公告]
• Once effective, taxpayers must:
  • Amend previous VAT filings from the effective date onward to the general taxpayer regime
  • Confirm and claim input VAT credit for qualifying invoices acquired from the status effective date. [guangdong….tax.gov.cn], [news.10jqka.com.cn], [国家税务总局关于增值…记管理有关事项的公告]

Abolition of Tax Counseling Period

• The VAT general taxpayer counseling period is abolished from January 1, 2026.
  • Previously, this grace period allowed newly registered general taxpayers to acquire and temporarily hold excess pre-paid VAT credits.
  • Going forward, any unutilized VAT credits must be either deducted or refunded via standard procedures. [guangdong….tax.gov.cn], [news.10jqka.com.cn]

Strategic Implications

• Consideration	Details
  Timing	With effective dates retroactive to exceeding-threshold months, real-time monitoring of sales is critical.
  Systems Readiness	VAT accounting systems must align closely with real-time thresholds and support proactive registration.
  Cash Flow Impact	Transitioning to general taxpayer status allows input tax refunds—but also introduces greater compliance obligations.
  Audit Exposure	Adjustments from audits leading to retroactive registration may result in penalties and back taxes being owed on delayed filings. [zhuanlan.zhihu.com], [news.10jqka.com.cn]