Key Changes in China’s 2026 VAT Law and Implementing Regulations: Scope, Tax Rates, and Compliance

• The new VAT Law and its Implementing Regulations took effect on January 1, 2026, introducing major changes to VAT in China.
• The definition of taxable transactions was revised to focus on where services or intangible assets are consumed in China or where the seller is a domestic entity/individual, aligning with global standards and reducing double taxation.
• Overseas services directly related to domestic goods are now considered taxable in China, though further clarification is needed on what constitutes “directly related to.”
• The three-tiered VAT rates (13%, 9%, 6%) are retained, with a 3% simplified tax method rate; the 5% rate and difference-based taxation require further clarification.
• The VAT rate for individuals selling real estate is set at 3%, and new rules clarify which tax rate applies when multiple rates are involved in a transaction.

Source: roedl.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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