China’s New VAT Law 2026: Key Implementation Insights for Cross-Border and Multinational Businesses

• China implemented its first Value-Added Tax (VAT) Law and supporting regulations on 1 January 2026, consolidating and updating existing policies.
• The new law reshapes VAT rules for cross-border services, intangibles, and financial products, focusing on the place of consumption rather than origin.
• Services or intangibles from overseas entities directly related to goods, real estate, or resources in China are now subject to Chinese VAT, though the term “directly related” remains undefined.
• VAT triggers for financial products have changed, with VAT applying if issued in China or sold by a domestic entity, creating challenges for complex products.
• The law simplifies deemed sales scenarios and tightens input VAT deduction rules, including new restrictions on loan services, non-taxable transactions, and certain employee benefits.

Source: china.acclime.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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