Implementation Regulations for the Value-Added Tax Law of the People's Republic of China

中华人民共和国增值税法实施条例

Promulgated by Decree No. 826 of the State Council on December 25, 2025. Effective January 1, 2026.

（2025年12月25日中华人民共和国国务院令第826号公布 自2026年1月1日起施行）

Sources:

• Chinese official text: State Taxation Administration Policy Database (fgk.chinatax.gov.cn)

All information in this document is authentic in Chinese only. This English translation is unofficial and provided for reference purposes.

Table of Contents

• Chapter 1 — General Provisions (Articles 1–7)
• Chapter 2 — Tax Rates (Articles 8–10)
• Chapter 3 — Tax Amount Payable (Articles 11–25)
• Chapter 4 — Tax Preferences (Articles 26–33)
• Chapter 5 — Tax Collection and Administration (Articles 34–53)
• Chapter 6 — Supplementary Provisions (Article 54)

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Chapter 1 — General Provisions 总则

Article 1

These Regulations are formulated in accordance with the Value-Added Tax Law of the People's Republic of China (hereinafter referred to as the "VAT Law").

Article 2

The term "goods" as referred to in Article 3 of the VAT Law includes tangible movable property, electricity, heat, gas, and the like.

The term "services" as referred to in Article 3 of the VAT Law includes transportation services, postal services, telecommunications services, construction services, financial services, as well as information technology services, cultural and sports services, attestation and consulting services, and other production and daily life services.

The term "intangible assets" as referred to in Article 3 of the VAT Law means assets that lack physical form but can generate economic benefits, including technology, trademarks, copyrights, goodwill, rights to use natural resources, and other intangible assets.

The term "immovable property" as referred to in Article 3 of the VAT Law means assets that cannot be moved or whose nature or shape would change upon being moved, including buildings, structures, and the like.

The specific scope of goods, services, intangible assets, and immovable property shall be proposed by the finance and taxation departments of the State Council, and shall take effect after approval by the State Council and promulgation.

Article 3

The term "entities" as referred to in Article 3 of the VAT Law includes enterprises, government agencies, public institutions, military units, social organizations, and other entities.

The term "individuals" as referred to in Article 3 of the VAT Law includes individual industrial and commercial households and natural persons.

Article 4

The phrase "services and intangible assets consumed within the territory of China" as referred to in Article 4, Paragraph 4 of the VAT Law means the following circumstances:

1. An overseas entity or individual sells services or intangible assets to a domestic entity or individual, except for services consumed on-site outside China;

2. The services or intangible assets sold by an overseas entity or individual are directly related to goods, immovable property, or natural resources within the territory of China;

3. Other circumstances as prescribed by the finance and taxation departments of the State Council.

Article 5

When a taxpayer issues a special VAT invoice, the sales amount and the VAT amount shall be separately itemized.

Article 6

A taxpayer that applies the general tax calculation method is a general taxpayer.

General taxpayers shall be subject to a registration system. The specific registration procedures shall be formulated by the taxation department of the State Council.

Article 7

Natural persons are classified as small-scale taxpayers. Non-enterprise entities that do not frequently engage in taxable transactions and whose principal business does not fall within the scope of taxable transactions may elect to pay tax as small-scale taxpayers.

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Chapter 2 — Tax Rates 税率

Article 8

The term "exported goods" as referred to in Article 10, Paragraph 4 of the VAT Law means goods that are declared to customs, have actually left the territory of China, and are sold to overseas entities or individuals, as well as goods deemed to be exported as prescribed by the State Council.

Article 9

The following services and intangible assets sold cross-border by domestic entities or individuals shall be subject to a zero tax rate:

1. Research and development services, contract energy management services, design services, broadcasting and film production and distribution services, software services, circuit design and testing services, information system services, business process management services, and offshore service outsourcing businesses sold to overseas entities that are entirely consumed outside China;

2. Technology transferred to overseas entities that is entirely used outside China;

3. International transportation services, space transportation services, and overseas repair and processing services.

Article 10

A taxable transaction as referred to in Article 13 of the VAT Law shall simultaneously satisfy the following conditions:

1. It comprises two or more components involving different tax rates or levy rates;

2. The components have a clear primary-ancillary relationship. The primary component occupies the dominant position and reflects the substance and purpose of the transaction; the ancillary component is a necessary supplement to the primary component and is premised upon the occurrence of the primary component.

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Chapter 3 — Tax Amount Payable 应纳税额

Article 11

The VAT deduction vouchers as referred to in Article 16 of the VAT Law shall comply with the relevant provisions of the taxation department of the State Council, and specifically include special VAT invoices, customs import VAT payment certificates, tax payment certificates, agricultural product purchase invoices, agricultural product sales invoices, and other deduction vouchers with an input tax deduction function.

Article 12

The input tax that a taxpayer may deduct from the output tax on the basis of VAT deduction vouchers includes:

1. The VAT amount itemized on a special VAT invoice obtained from the seller;

2. The VAT amount itemized on a customs import VAT payment certificate obtained from customs;

3. The VAT amount itemized on a tax payment certificate obtained in connection with the purchase of services, intangible assets, or domestic immovable property from an overseas entity or individual;

4. When purchasing agricultural products, except where a special VAT invoice or customs import VAT payment certificate is obtained, the input tax calculated on the basis of an agricultural product purchase invoice or agricultural product sales invoice, unless otherwise provided by the State Council;

5. The VAT amount itemized or included on other VAT deduction vouchers obtained from the seller.

Article 13

Where a taxpayer calculates and pays VAT using the general tax calculation method, the VAT amount refunded to the buyer due to sales discounts, suspension, or returns shall be deducted from the output tax of the current period; the VAT amount recovered due to sales discounts, suspension, or returns shall be deducted from the input tax of the current period.

Article 14

Where a taxpayer calculates and pays VAT using the simplified tax calculation method, the sales amount refunded to the buyer due to sales discounts, suspension, or returns shall be deducted from the sales amount of the current period. If, after deducting the sales amount of the current period, there is still an overpayment of tax, the excess may be deducted from the tax payable of subsequent periods or a refund may be applied for in accordance with the relevant provisions.

Article 15

The term "total price" as referred to in Article 17 of the VAT Law does not include the following taxes, fees, or amounts collected on behalf of others by the taxpayer:

1. Government funds or administrative fees;

2. Consumption tax arising from the processing of consumer goods subject to consumption tax on a commission basis;

3. Vehicle purchase tax and vehicle and vessel tax;

4. Amounts collected on behalf of the principal where invoices are issued in the name of the principal.

Article 16

Where a taxpayer adopts a pricing method that combines the sales amount and the VAT amount, the sales amount shall be calculated using the following formulas:

Sales amount under the general tax calculation method = tax-inclusive sales amount / (1 + tax rate)

Sales amount under the simplified tax calculation method = tax-inclusive sales amount / (1 + levy rate)

Article 17

Where a taxpayer settles the sales amount in a currency other than RMB, the exchange rate used for conversion into RMB may be the central parity rate of the RMB exchange rate effective on the day the sales amount arises or on the first day of that month. Once the taxpayer has determined the exchange rate, it may not be changed within 12 months.

Article 18

Where a taxpayer falls under the circumstances prescribed in Article 20 of the VAT Law, the tax authority may determine the sales amount in the following order of methods:

1. Determined based on the average price at which the taxpayer sold similar goods, services, intangible assets, or immovable property in the most recent period;

2. Determined based on the average price at which other taxpayers sold similar goods, services, intangible assets, or immovable property in the most recent period;

3. Determined based on the composite assessable price. The formula for the composite assessable price is:

Composite assessable price = cost x (1 + cost-profit margin) + consumption tax amount

The cost-profit margin in the formula is 10%. The taxation department of the State Council may adjust the cost-profit margin based on the actual cost-profit conditions of the industry.

Article 19

The term "abnormal losses" as referred to in Article 22, Paragraph 3 of the VAT Law means losses of goods due to theft, loss, mold, or deterioration caused by poor management, as well as the seizure, destruction, or demolition of goods or immovable property in accordance with the law due to violations of laws and regulations.

The abnormal loss items as referred to in Article 22, Paragraph 3 of the VAT Law include:

1. Purchased goods that have suffered abnormal losses, and the related processing, repair, and replacement services and transportation services;

2. Purchased goods (excluding fixed assets), processing, repair, and replacement services, and transportation services consumed in the production of work-in-progress and finished products that have suffered abnormal losses;

3. Immovable property that has suffered abnormal losses, and the purchased goods and construction services consumed in such immovable property;

4. Purchased goods and construction services consumed in immovable property under construction that has suffered abnormal losses. Immovable property under construction includes immovable property that the taxpayer newly constructs, renovates, expands, repairs, or decorates.

The term "goods" as referred to in Items (3) and (4) of the second paragraph of this Article means materials and equipment that form the physical substance of the immovable property, including construction and decoration materials, and water supply and drainage, heating, sanitary, ventilation, lighting, communication, gas, fire protection, central air conditioning, elevator, electrical, photovoltaic power generation, intelligent building equipment, and supporting facilities.

The term "fixed assets" as used in these Regulations means machinery, mechanical equipment, transportation vehicles, and other equipment, tools, and instruments related to production and business operations that have a useful life exceeding 12 months.

Article 20

A taxpayer's business entertainment consumption shall be treated as personal consumption as referred to in the VAT Law.

Article 21

The input tax corresponding to the interest expenses on loan services purchased by a taxpayer, and the expenses for investment and financing advisory fees, handling fees, consulting fees, and other fees paid to the lender that are directly related to such loan services, may not be deducted from the output tax for the time being.

The finance and taxation departments of the State Council shall conduct timely research and evaluation of the effectiveness of the policy prohibiting the deduction of input tax corresponding to interest and related expenses on purchased loan services from the output tax.

Article 22

Where a taxpayer purchases goods, services, intangible assets, or immovable property for use in non-taxable transactions that simultaneously satisfy the following conditions (hereinafter collectively referred to as "non-deductible non-taxable transactions"), the corresponding input tax may not be deducted from the output tax:

1. The taxpayer engages in business activities other than those under Articles 3 through 5 of the VAT Law, and obtains monetary or non-monetary economic benefits related thereto;

2. The activity does not fall under the circumstances prescribed in Article 6 of the VAT Law.

Article 23

Where a general taxpayer purchases goods (excluding fixed assets) or services for use in items subject to the simplified tax calculation method, items exempt from VAT, and non-deductible non-taxable transactions, and the non-deductible input tax cannot be separately identified, the non-deductible input tax for the current period shall be calculated on a periodic basis according to the proportion of sales amount or income, with an annual reconciliation to be completed during the tax filing period in January of the following year.

Article 24

Where purchased goods (excluding fixed assets) or services for which input tax has already been deducted fall under the circumstances prescribed in Article 22, Items (3) through (5) of the VAT Law, the corresponding input tax shall be deducted from the input tax of the current period; if the corresponding input tax cannot be determined, the input tax to be deducted shall be calculated based on the actual cost of the current period.

Article 25

Where a general taxpayer acquires fixed assets, intangible assets, or immovable property (hereinafter collectively referred to as "long-term assets") that are used for both items subject to the general tax calculation method and items subject to the simplified tax calculation method, items exempt from VAT, non-deductible non-taxable transactions, collective welfare, or personal consumption (hereinafter collectively referred to as "five categories of non-deductible items"), such assets are mixed-use long-term assets, and the corresponding input tax shall be handled in accordance with the VAT Law and the following provisions:

1. For an individual long-term asset with an original value not exceeding RMB 5,000,000, the corresponding input tax may be fully deducted from the output tax;

2. For an individual long-term asset with an original value exceeding RMB 5,000,000, the input tax shall be fully deducted at the time of purchase, and thereafter, during the period of mixed use, the input tax corresponding to the five categories of non-deductible items that may not be deducted from the output tax shall be calculated based on the adjustment period and adjusted on an annual basis.

The specific operating procedures for the deduction of input tax on long-term assets shall be formulated by the finance and taxation departments of the State Council.

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Chapter 4 — Tax Preferences 税收优惠

Article 26

The term "agricultural producers" as referred to in Article 24, Paragraph 1, Item (1) of the VAT Law means entities and individuals engaged in agricultural production; the term "agricultural products" means primary agricultural products.

Article 27

The term "medical institutions" as referred to in Article 24, Paragraph 1, Item (2) of the VAT Law means institutions established in accordance with the relevant provisions that hold medical institution practice qualifications, including medical institutions of all levels and types under the military and armed police forces, but excluding for-profit cosmetic medical institutions.

Article 28

The term "antique and second-hand books" as referred to in Article 24, Paragraph 1, Item (3) of the VAT Law means antique books and used books purchased from the public.

Article 29

The term "nurseries and kindergartens" as referred to in Article 24, Paragraph 1, Item (7) of the VAT Law means institutions established in accordance with the relevant provisions that have obtained childcare or preschool education qualifications; the income exempt from VAT is the childcare fees and childcare education fees within the scope prescribed by the relevant fee standards. The term "elderly care institutions" means various types of elderly care institutions established in accordance with the relevant provisions that provide centralized accommodation and nursing care services for the elderly. The term "disabled persons service institutions" means institutions established in accordance with the relevant provisions that are dedicated to providing relevant services to persons with disabilities.

Article 30

The term "schools" as referred to in Article 24, Paragraph 1, Item (8) of the VAT Law means institutions established in accordance with the relevant provisions that provide academic education, as well as technical worker schools, senior technical worker schools, and technician colleges.

Article 31

The term "admission ticket revenue" as referred to in Article 24, Paragraph 1, Item (9) of the VAT Law means the revenue from the first admission ticket.

Article 32

The scope of application, standards, conditions, and other aspects of VAT preferential policies shall be promptly disclosed to the public in accordance with the law.

Article 33

The finance and taxation departments of the State Council shall conduct timely research and evaluation of the effectiveness of VAT preferential policies, and promptly report to the State Council for adjustment and improvement of preferential policies that are no longer suited to the needs of national economic and social development.

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Chapter 5 — Tax Collection and Administration 征收管理

Article 34

Where an entity operates through contracting, leasing, or affiliation arrangements, and the contractor, lessee, or affiliated party carries out business operations in the name of the contracting party, lessor, or affiliated party, and the contracting party, lessor, or affiliated party bears the relevant legal liability, the contracting party, lessor, or affiliated party shall be the taxpayer; in other circumstances, the contractor, lessee, or affiliated party shall be the taxpayer.

For taxable transactions occurring during the operation of asset management products, the asset management product manager shall be the taxpayer. Where laws provide otherwise, such provisions shall prevail.

Article 35

Where a natural person engages in a qualifying taxable transaction, the domestic entity paying the consideration shall be the withholding agent. The specific operating procedures for withholding and remittance shall be formulated by the finance and taxation departments of the State Council.

Where an overseas entity or individual leases immovable property within the territory of China to a natural person, and there is a domestic agent, the domestic agent shall declare and pay the tax.

Article 36

Unless otherwise provided by these Regulations, where an entity or an individual industrial and commercial household has annual VAT-taxable sales exceeding the small-scale taxpayer threshold, it shall register as a general taxpayer with the competent tax authority, and shall calculate and pay VAT using the general tax calculation method from the period in which the small-scale taxpayer threshold is exceeded.

Where a small-scale taxpayer meets the conditions prescribed in Article 9, Paragraph 2 of the VAT Law, it may register as a general taxpayer with the competent tax authority, and shall calculate and pay VAT using the general tax calculation method from the period in which the registration is completed.

Once a taxpayer has registered as a general taxpayer, it may not convert back to a small-scale taxpayer.

Article 37

A taxpayer that engages in a taxable transaction shall issue an invoice to the buyer. Under any of the following circumstances, a special VAT invoice may not be issued:

1. The buyer of the taxable transaction is a natural person;

2. The taxable transaction is exempt from VAT;

3. Other circumstances as prescribed by the finance and taxation departments of the State Council.

Article 38

Where a taxpayer has engaged in a taxable transaction and issued a special VAT invoice, and subsequently an invoicing error, sales discount, suspension, or return occurs, the taxpayer shall void the invoice or issue a red-letter special VAT invoice in accordance with the provisions of the taxation department of the State Council; if the invoice is not voided or a red-letter special VAT invoice is not issued in accordance with the provisions, the taxpayer may not deduct the output tax or sales amount in accordance with Articles 13 and 14 of these Regulations.

Article 39

The term "receipt of sales proceeds" as referred to in Article 28, Paragraph 1, Item (1) of the VAT Law means that the taxpayer receives payment during or after the completion of the taxable transaction. The phrase "the day on which the documentary evidence for claiming the sales proceeds is obtained" means the payment date specified in the written contract; where no written contract is signed or the written contract does not specify a payment date, it means the day on which the taxable transaction is completed, i.e., the day on which goods are dispatched, services are completed, ownership of financial instruments is transferred, the transfer of intangible assets is completed, or the transfer of immovable property is completed.

Article 40

The phrase "the day on which a deemed taxable transaction is completed" as referred to in Article 28, Paragraph 1, Item (2) of the VAT Law means the day on which goods are dispatched, ownership of financial instruments is transferred, the transfer of intangible assets is completed, or the transfer of immovable property is completed.

Article 41

Where a taxpayer exports goods and the date of customs declaration for export is earlier than the time at which the tax obligation arises under Article 28, Paragraph 1, Items (1) and (2) of the VAT Law, the time at which the tax obligation arises shall be the date on which the goods are declared to customs for export.

Article 42

The phrase "approved by the finance and taxation departments at or above the provincial level to allow the head office to file consolidated tax returns" as referred to in Article 29, Item (1) of the VAT Law means that for a taxpayer with a fixed place of production or business operations, where the head office and branch offices are not located in the same province (autonomous region or municipality directly under the central government), upon approval by the finance and taxation departments of the State Council, the head office may file consolidated tax returns with the competent tax authority at the location of the head office; where the head office and branch offices are located in the same province (autonomous region or municipality directly under the central government) but not in the same county (city, district, or banner), upon approval by the finance and taxation departments of the province (autonomous region or municipality directly under the central government), the head office may file consolidated tax returns with the competent tax authority at the location of the head office.

Article 43

The following taxpayers may apply a tax calculation period of one quarter as prescribed in Article 30 of the VAT Law:

1. Small-scale taxpayers;

2. Banks, finance companies, trust companies, and credit cooperatives that are general taxpayers;

3. Other taxpayers as determined by the taxation and finance departments of the State Council.

Article 44

A taxpayer that pays tax on a per-transaction basis shall, where the sales amount reaches the threshold, file and pay tax from the date on which the tax obligation arises until June 30 of the following year.

Article 45

Tax shall be prepaid in accordance with the relevant provisions under the following circumstances:

1. Construction services provided across prefectural-level administrative regions (or across county-level districts under municipalities directly under the central government);

2. Construction services provided under advance payment arrangements;

3. Real estate projects sold under pre-sale arrangements;

4. Transfer or leasing of immovable property located in a county (city, district, or banner) different from the one where the taxpayer's institution is located;

5. Oil and gas field enterprises selling services related to the production of crude oil and natural gas across provinces, autonomous regions, or municipalities directly under the central government.

The specific operating procedures for prepayment of tax under the first paragraph of this Article shall be formulated by the finance and taxation departments of the State Council.

Article 46

Where the finance and taxation departments at or above the provincial level have approved the head office to file consolidated tax returns, the approving authorities may require the branch offices to prepay tax.

Article 47

Where a taxpayer exports goods or sells services or intangible assets cross-border (hereinafter collectively referred to as "export business"), and applies for a tax refund (exemption) in accordance with Article 33 of the VAT Law, the refund (exemption) amount shall be calculated in accordance with the export tax refund rate prescribed by the State Council, using either the exemption-credit-refund method or the exemption-refund method, and the refund (exemption) shall be processed after verification and approval by the tax authority.

The exemption-credit-refund method means that VAT is exempt at the export stage, the corresponding input tax is credited against the VAT payable, and any uncredited portion is refunded. The exemption-refund method means that VAT is exempt at the export stage, and the corresponding input tax is refunded.

Article 48

Where a taxpayer applies a tax refund (exemption) or VAT exemption to export business, the taxpayer shall file within the prescribed time limit; if the filing is overdue, the taxpayer shall pay VAT as if the transaction were a domestic sale.

Where a taxpayer exports goods on a commission basis, the taxpayer shall complete the commissioned export procedures in accordance with the provisions of the taxation department of the State Council, and the principal shall apply for the export tax refund (exemption), VAT exemption, or pay VAT in accordance with the provisions; where the commissioned export procedures have not been completed, the consignor of the exported goods shall file and pay VAT in accordance with the provisions.

Article 49

Where a taxpayer applies a tax refund (exemption) to export business, the taxpayer may waive the tax refund (exemption) and elect VAT exemption or to pay VAT, and from the month following the date of waiver, the export business eligible for tax refund (exemption) shall be exempt from VAT or subject to VAT in accordance with the provisions.

Where a taxpayer applies VAT exemption to export business, the taxpayer may waive the VAT exemption and elect to pay VAT, and from the month following the date of waiver, the export business eligible for VAT exemption shall be subject to VAT in accordance with the provisions.

A taxpayer that has waived the tax refund (exemption) or VAT exemption for export business may not re-apply the tax refund (exemption) or VAT exemption within 36 months.

Article 50

Where an export business for which a tax refund (exemption) has been processed experiences sales discounts, suspension, or returns, the taxpayer shall repay the tax that has been refunded (exempted).

Article 51

The specific operating procedures for VAT export tax refund (exemption) shall be formulated by the finance and taxation departments of the State Council.

Article 52

The tax authority may lawfully obtain from relevant entities and individuals information related to export tax collection and administration, including logistics, customs declaration, freight forwarding, and fund settlement information, and the relevant entities and individuals shall provide such information. The tax authority and its staff shall keep such information confidential and shall not use it for purposes other than tax collection and administration. Where laws or administrative regulations provide otherwise, such provisions shall prevail.

Article 53

Where a taxpayer implements an arrangement that lacks a reasonable commercial purpose to reduce, exempt, or defer the payment of VAT, or to obtain an early or excessive tax refund, the tax authority may make adjustments in accordance with the Tax Collection and Administration Law of the People's Republic of China and the relevant administrative regulations.

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Chapter 6 — Supplementary Provisions 附则

Article 54

These Regulations shall take effect on January 1, 2026.