Chinese VAT compliance and rates

Chinese VAT compliance

There are detailed rules controlling the recording and processing of Chinese activities. These include guidelines on:

  • Chinese invoice requirements (including authorised software for producing invoices);
  • Foreign currency reporting and translation;
  • Credit notes and corrections; and
  • The correct format of accounting records.

Chinese VAT returns

VAT settlement and reporting periods vary enormously in China, depending on the goods.  They can be immediate, or stretch to quarterly.

For short-term reporting periods, the tax should be remitted within 5 days.  For monthly or quarterly reporting cycles, VAT should be settled 15 days after the period end.

Vat refunds in China

There is no facility for the refund of Chinese VAT to non-residents.

Chinese VAT rates

The standard rate of VAT is 17 % .  There are other taxes, including Business Tax (3% to 20%) on services. There is also a reduced rate of 13% applied to: basic foodstuffs; agricultural products and other items. For small entrepreneurs, the VAT rate applicable is 3% with limits on VAT deductions.

Chinese VAT Rates

Rate Type Which goods or services
17% Standard
13% Reduced including sale or import of foodstuffs; tap water; central heating; air conditioning; coal and natural gas; coal products for residential use; import of books; newspapers and magazines; fertilizer, feed, pesticides; farming machinery and other agricultural products; audio and video publications; digital publications.
11% Reduced construction and real estate industries; transportation sector; telecommunications services industry.
6% Reduced IT services; financial services; some telecommunications services; cultural and creative services.
5% Reduced Certain sales of natural gas and crude oil; real estate sales.
3% Reduced Large water companies; certain building materials; tap water; some second hand goods and certain power generators.
2% Reduced self-used second hand goods and some self-produced fixed assets.
0% Zero Exported services and most goods for export.
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