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|
|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.|