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

On December 25, 2025, Premier Li Qiang of the State Council signed State Council Order No. 826, promulgating the Implementing Regulations of the PRC Value-Added Tax Law (hereinafter referred to as the Regulations), effective January 1, 2026. Recently, officials from the Ministry of Justice, the Ministry of Finance, and the State Taxation Administration answered reporters' questions on issues related to the Regulations.

Q: Please briefly introduce the background for formulating the Regulations.

Answer: The Party Central Committee and the State Council attach great importance to VAT legislation and reform. The Third Plenary Session of the 20th Central Committee of the Party proposed to improve the tax system conducive to high-quality development, social fairness, and market unity, and optimize the tax structure. The Fourth Plenary Session of the 20th Central Committee of the Party proposed to standardize tax preferential policies and maintain a reasonable macro tax burden level. VAT covers all industries and all chains of the national economy and is currently China's largest tax category. In 1993, the State Council formulated and promulgated the Interim Regulations of the People's Republic of China on Value-Added Tax (hereinafter referred to as the Interim Regulations), after which the Ministry of Finance and the State Taxation Administration formulated the Detailed Rules for the Implementation of the Interim Regulations of the People's Republic of China on Value-Added Tax as supporting provisions of the Interim Regulations. In December 2024, the 13th session of the Standing Committee of the 14th National People's Congress deliberated and passed the Value-Added Tax Law of the People's Republic of China (hereinafter referred to as the VAT Law), effective January 1, 2026, and simultaneously repealed the Interim Regulations. To ensure the effective implementation of the VAT Law, further improve relevant institutional measures, and enhance the operability of the tax system, it is necessary to formulate the Regulations and build a supporting and connected VAT system.

Q: In what aspects is the significance of formulating the Regulations reflected?

Answer: Mainly reflected in the following three aspects:First, It is conducive to implementing the principle of statutory taxation, ensuring the effective implementation of the VAT Law, enhancing the operability of the tax system, building a supporting and interconnected VAT system, and improving a VAT system conducive to high-quality development.Second, It is conducive to promoting fairness in the rule of law for taxation. The Regulations set out provisions on VAT system elements, preferential policies, collection and management, etc., ensuring that the VAT system is unified, standardized, and operable nationwide, safeguarding fair competition, and promoting the building of a unified national market.Third It is conducive to stabilizing market expectations. The Regulations further refine and clarify the relevant provisions of the VAT Law, stabilize market expectations, and help create a first-class market-oriented, law-based, and internationalized business environment.

Q: What is the overall approach for formulating the Regulations?

Answer: The overall approach mainly focuses on the following three points:First, Comprehensively implement the VAT Law. Refine and further clarify matters related to the VAT Law's relevant systems and matters authorized to be prescribed by the State Council.Second, Maintain continuity of the tax system. Incorporate effective institutional measures from current regulations into the Regulations, without adding new taxpayer burdens.Third Uphold overall coordination. While adhering to the basic tax system elements and policy boundaries established by the VAT Law, leave room for practical operation, authorize the competent finance and tax departments of the State Council to formulate relevant supporting measures, and at the same time make clear that important supporting measures shall be implemented after approval by the State Council.

Q: What detailed provisions does the Regulations make regarding the scope of VAT taxation?

Answer: The Regulations make detailed provisions on the "goods," "services," "intangible assets" and "immovable property" referred to in Article 3 of the VAT Law:First, Goods include tangible movable property, electricity, heat, gas, etc.;Second, Services include transportation services, postal services, telecommunications services, construction services, financial services, as well as information technology services, culture and sports services, authentication and consulting services, and other production and living services;Third Intangible assets refer to assets that have no physical form but can bring economic benefits, including technology, trademarks, copyrights, goodwill, natural resource use rights, and other intangible assets;Fourth, Real estate refers to assets that cannot be moved or that would change in nature or shape if moved, including buildings and structures. The Ministry of Finance and the State Taxation Administration will issue supporting documents to further specify the specific scope of goods, services, intangible assets, and real estate, which will be published and implemented after approval by the State Council.

Q: What provisions does the Regulations make regarding standardizing VAT preferential policies?

Answer: The Fourth Plenary Session of the 20th Central Committee of the Communist Party of China proposed to standardize tax incentive policies. The Regulations mainly provide for the following three aspects:First, Clarify the specific standards in the VAT Law for VAT-exempt items such as agricultural producers, agricultural products, and medical institutions;Second, It stipulates that the scope, standards, and conditions of VAT preferential policies shall be disclosed to the public in accordance with the law and in a timely manner;Third Require that the competent finance and tax departments of the State Council should study and evaluate the implementation effects of VAT preferential policies in a timely manner, and promptly report to the State Council for adjustment and improvement those preferential policies that no longer meet the needs of national economic and social development.

Q: What provisions does the Regulations make regarding standardizing VAT export refund (exemption)?

Answer: Article 33 of the VAT Law authorizes the State Council to formulate specific measures for export tax refund (exemption). To implement the VAT Law and ensure that export tax refund (exemption) is carried out in a standardized manner, the Regulations stipulate the calculation method for export tax refund (exemption), the filing deadline, the principles for handling taxpayers' waiver of the application of export tax refund (exemption), etc., and authorize the competent finance and tax authorities of the State Council to formulate specific operational measures for export tax refund (exemption).

Q: How will the Ministry of Finance and the State Taxation Administration ensure that the Regulations are better implemented and effective?

Answer: To ensure better implementation and effectiveness of the "Regulations," the Ministry of Finance and the State Taxation Administration will focus on carrying out the following three aspects of work:First, Promptly improve supporting institutional provisions. The Ministry of Finance and the State Taxation Administration will formulate specific operational measures for input VAT deduction on long-term assets, tax prepayment, and export tax rebates (exemptions), further refining policy content and unifying implementation standards; the State Taxation Administration will also formulate supporting collection and administration announcements to further clarify specific collection and administration operational matters.Second, Do a good job in information system transformation. Upgrade and improve the tax information system according to policy adjustments, complete system transformation and function testing in a timely manner, and provide efficient service channels such as policy guidance, convenient filing, and intelligent verification, maximizing convenient tax services for taxpayers.Third Extensive organizational training and guidance. Through various forms, strengthen extensive publicity of the Regulations, organize relevant training and guidance, provide taxpayers with policy interpretation and Q&A consulting services, and promptly respond to taxpayer concerns.

Order of the State Council of the People's Republic of China
No. 826

The "Implementing Regulations of the Value-Added Tax Law of the People's Republic of China" were adopted at the 75th executive meeting of the State Council on December 19, 2025, and are hereby promulgated, taking effect on January 1, 2026.

 

Premier Li Qiang

December 25, 2025

 

 

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

  

Chapter One General Provisions

 

Article 1　According to "Value-Added Tax Law of the People's Republic of China"(hereinafter referred to as the VAT Law), and formulate these Regulations.

Article 2　The term "goods" as mentioned in Article 3 of the VAT Law includes tangible movable property, electricity, heat, gas, etc.

The term "services" as mentioned in Article 3 of the VAT Law includes transportation services, postal services, telecommunications services, construction services, financial services, as well as production and living services such as information technology services, cultural and sports services, and certification and consulting services.

The term "intangible assets" as mentioned in Article 3 of the VAT Law refers to assets that have no physical form but can bring economic benefits, including technology, trademarks, copyrights, goodwill, the right to use natural resources and other intangible assets.

The term "immovable property" as mentioned in Article 3 of the VAT Law refers to assets that cannot be moved or that would change in nature or shape if moved, including buildings, structures, etc.

The competent finance and tax departments of the State Council shall propose the specific scope of goods, services, intangible assets, and real estate, and promulgate and implement them after approval by the State Council.

Article 3　The term "entities" as mentioned in Article 3 of the VAT Law includes enterprises, administrative organs, public institutions, military units, social organizations and other entities.

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

Article 4　The consumption of services and intangible assets within China as mentioned in Article 4, Item 4 of the VAT Law refers to the following circumstances:

(1) Overseas entities or individuals selling services or intangible assets to domestic entities or individuals, except for services consumed on-site overseas;

(II) Services and intangible assets sold by overseas entities or individuals are directly related to goods, real estate, or natural resources within China;

(3) Other circumstances prescribed by the finance and tax competent departments of the State Council.

Article 5　When a taxpayer issues a VAT special invoice, it shall separately state the sales amount and the VAT amount.

Article 6　Taxpayers applying the general tax calculation method are general taxpayers.

General VAT taxpayers implement a registration system, and the specific registration measures shall be formulated by the tax authority under the State Council.

Article 7　An individual is a small-scale taxpayer. Non-enterprise units that do not frequently engage in taxable transactions and whose main business is not within the scope of taxable transactions may choose to pay taxes as small-scale taxpayers.

 

Chapter 2 Tax rates

 

Article 8　The term "export goods" as mentioned in Article 10, Item 4 of the VAT Law refers to goods that are declared to customs, actually leave the territory and are sold to overseas entities or individuals, as well as goods deemed as exports as stipulated by the State Council.

Article 9　For the following services and intangible assets sold cross-border by domestic units or individuals, the tax rate is zero:

(1) R&D services, contract energy management services, design services, radio, film and television production and distribution services, software services, circuit design and testing services, information system services, business process management services, and offshore service outsourcing business sold to overseas entities and consumed entirely overseas;

(II) Technology transferred to overseas entities that is used entirely overseas;

(3) International transport services, space transport services, and external repair and replacement services.

Article 10　The term "taxable transaction" as mentioned in Article 13 of the VAT Law shall simultaneously meet the following conditions:

(1) Involves two or more businesses subject to different tax rates or levy rates;

(2) There is an obvious principal-accessory relationship between the businesses. The main business occupies the dominant position, reflecting the substance and purpose of the transaction; the accessory business is a necessary supplement to the main business and is premised on the occurrence of the main business.

 

Chapter 3 Tax Payable

 

Article 11　The term "VAT deduction vouchers" as mentioned in Article 16 of the VAT Law shall comply with the relevant provisions of the competent tax authorities of the State Council, and specifically include VAT special invoices, customs import VAT special payment statements, tax payment vouchers, agricultural product purchase invoices, agricultural product sales invoices and other deduction vouchers with input VAT deduction functions.

Article 12　The input VAT deducted by a taxpayer from output VAT based on VAT deduction vouchers includes:

(1) The VAT amount stated on the special VAT invoice obtained from the seller;

(2) The VAT amount listed on the special VAT payment certificate for customs imports obtained from customs;

(3) The VAT amount listed on the tax payment voucher obtained from purchasing services, intangible assets, or domestic real estate from overseas entities or individuals;

(4) When purchasing agricultural products, in addition to obtaining special VAT invoices or customs import VAT special payment statements, the input tax amount calculated based on agricultural product purchase invoices or agricultural product sales invoices, unless otherwise provided by the State Council;

(5) The VAT amount stated or included in other VAT deduction vouchers obtained from the seller.

Article 13　Where a taxpayer calculates and pays VAT according to the general tax calculation method, the VAT amount refunded to the purchaser due to sales allowance, termination, or return shall be deducted from the output tax of the current period; the VAT amount recovered due to sales allowance, termination, or return shall be deducted from the input tax of the current period.

Article 14　Where a taxpayer calculates and pays VAT according to the simplified tax calculation method, the sales amount refunded to the purchaser due to sales allowance, termination, or return shall be deducted from the sales amount of the current period. If there is still overpaid tax after deducting the current period's sales amount, it may be deducted from future tax payable or a refund may be applied for in accordance with regulations.

Article 15　The term "total price" as mentioned in Article 17 of the VAT Law does not include the following taxes, fees or amounts collected by the taxpayer on behalf of others:

(1) Government funds or administrative and institutional charges;

(2) Consumption tax arising from entrusted processing of consumer goods subject to consumption tax;

(3) Vehicle purchase tax and vehicle and vessel tax;

(4) Amounts collected on behalf of the principal for which invoices are issued in the principal's name.

Article 16　Where a taxpayer adopts the method of combining the sales amount and value-added tax amount for pricing, the sales amount shall be calculated according to the following formula:

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　If a taxpayer settles sales amount in a currency other than RMB, when converting into RMB for calculation, the conversion rate may be the effective central parity rate of the RMB on the day the sales amount occurs or on the first day of the month. Once the taxpayer determines the conversion rate, it shall not be changed within 12 months.

Article 18　If a taxpayer falls under the circumstances specified in Article 20 of the VAT Law, the tax authority may determine the sales amount in order according to the following methods:

(1) Determined according to the average price of similar goods, services, intangible assets, or real estate sold by the taxpayer in the most recent period;

(II) Determined according to the average price of similar goods, services, intangible assets, or real estate sold by other taxpayers in the most recent period;

(3) Determined according to the composite assessable price. The formula for the composite assessable price is:

Composite taxable price = cost × (1 + cost profit margin) + consumption tax amount

In the formula, the cost-profit ratio is 10%. The competent tax department of the State Council may adjust the cost-profit ratio based on the actual industry cost-profit situation.

Article 19　The term "abnormal loss" as mentioned in Article 22, Item 3 of the VAT Law refers to circumstances such as theft, loss, mildew and deterioration of goods caused by poor management, as well as confiscation, destruction or demolition of goods or immovable property in accordance with the law due to violation of laws and regulations.

The term "abnormal loss items" as mentioned in Article 22, Item 3 of the VAT Law includes:

(1) Purchased goods with abnormal losses, as well as 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 abnormal losses of work-in-progress and finished goods;

(3) Real estate subject to abnormal losses, as well as purchased goods and construction services consumed by such real estate;

(4) Input goods and construction services consumed by real estate under construction due to abnormal losses. Real estate under construction includes taxpayers' newly built, renovated, expanded, repaired, and decorated real estate.

Goods referred to in Item 3 and Item 4 of the second paragraph of this Article means materials and equipment constituting the physical entity of real property, including building decoration materials and water supply and drainage, heating, sanitation, ventilation, lighting, communications, gas, fire protection, central air conditioning, elevators, electrical, photovoltaic power generation, intelligent building equipment and supporting facilities, etc.

Fixed assets referred to in these Regulations means machinery, mechanical equipment, means of transport, and other equipment, tools, and instruments related to production and operation with a service life exceeding 12 months.

Article 20　A taxpayer's business entertainment consumption belongs to personal consumption as referred to in the Value-Added Tax Law.

Article 21　For a taxpayer's interest expenditure on purchased loan services, and expenditures paid to the lender for investment and financing advisory fees, handling fees, consulting fees, and other expenses directly related to the loan service, the corresponding input tax may temporarily not be deducted from the output tax.

The competent finance and tax departments of the State Council shall study and evaluate in a timely manner the implementation effects of the policy that the input tax corresponding to interest on purchased loan services and related expenses shall not be deducted from output tax.

Article 22　Where a taxpayer purchases goods, services, intangible assets, or real estate for non-taxable transactions that simultaneously meet the following circumstances (hereinafter collectively referred to as non-deductible non-taxable transactions), the corresponding input tax may not be deducted from the output tax:

(1) Engaging in business activities other than those specified in Articles 3 to 5 of the VAT Law and obtaining related monetary or non-monetary economic benefits;

(2) Circumstances not falling under Article 6 of the VAT Law.

Article 23　Where a general taxpayer purchases goods (excluding fixed assets) or services for projects subject to simplified tax calculation, VAT-exempt projects, or non-taxable transactions for which deduction is not allowed, and the non-deductible input tax cannot be divided, it shall calculate the non-deductible input tax for the current period on a period-by-period basis according to the proportion of sales amount or revenue, and conduct an annual consolidated settlement within the tax filing period of January of the following year.

Article 24　If purchased goods (excluding fixed assets) or services for which input VAT has been deducted fall under the circumstances specified in Article 22, Items 3 to 5 of the VAT Law, the corresponding input VAT shall be deducted from the current period's input VAT; if the corresponding input VAT cannot be determined, the input VAT to be deducted shall be calculated based on the actual cost of the current period.

Article 25　Where fixed assets, intangible assets, or real estate (hereinafter collectively referred to as long-term assets) acquired by a general VAT taxpayer are used both for projects subject to the general tax calculation method and for projects subject to the simplified tax calculation method, VAT-exempt projects, non-taxable transactions for which deduction is not allowed, collective welfare, or personal consumption (hereinafter collectively referred to as the five categories of non-deductible items), they are long-term assets used for mixed purposes, and the corresponding input tax shall be handled in accordance with the VAT Law and the following provisions:

(1) For a single long-term asset with an original value not exceeding 5 million yuan, the corresponding input VAT amount may be fully deducted from the output VAT amount;

(2) For a single long-term asset with an original value exceeding 5 million yuan, the input tax amount shall be fully deducted at the time of purchase; thereafter, during the period of mixed use, the input tax amount 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 year by year.

The specific operational measures for input tax deduction on long-term assets shall be formulated by the finance and tax authorities under the State Council.

 

Chapter 4 Tax Incentives

 

Article 26　The term "agricultural producers" as mentioned in Article 24, Paragraph 1, Item 1 of the VAT Law refers to units and individuals engaged in agricultural production; the term "agricultural products" refers to primary agricultural products.

Article 27　The term "medical institutions" as mentioned in Article 24, Paragraph 1, Item 2 of the VAT Law refers to institutions established in accordance with relevant provisions that hold medical institution practice qualifications, including medical institutions at all levels and of all types under the military and armed police forces, but excluding for-profit medical beauty institutions.

Article 28　The term "ancient and old books" as mentioned in Article 24, Paragraph 1, Item 3 of the VAT Law refers to ancient books and old books purchased from the public.

Article 29　The term "nurseries and kindergartens" as mentioned in Article 24, Paragraph 1, Item 7 of the VAT Law refers to institutions established in accordance with relevant provisions that have obtained qualifications for childcare or preschool education, and their VAT-exempt income refers to childcare fees and childcare education fees within the prescribed fee standards; the term "elderly care institutions" refers to various types of elderly care institutions established in accordance with relevant provisions that provide centralized accommodation and care services for the elderly; the term "service institutions for persons with disabilities" refers to institutions established in accordance with relevant provisions that specifically provide related services for persons with disabilities.

Article 30　The term "schools" as mentioned in Article 24, Paragraph 1, Item 8 of the VAT Law refers to institutions established in accordance with relevant provisions that provide academic education, as well as technical schools, senior technical schools and technician colleges.

Article 31　The term "ticket revenue" as mentioned in Article 24, Paragraph 1, Item 9 of the VAT Law refers to first-gate ticket revenue.

Article 32　The scope of application, standards, conditions, etc. of VAT preferential policies shall be disclosed to the public in a timely manner in accordance with the law.

Article 33　The competent finance and tax departments of the State Council shall study and evaluate in a timely manner the implementation effects of VAT preferential policies, and for preferential policies that no longer meet the needs of national economic and social development, promptly report to the State Council for adjustment and improvement.

 

Chapter 5 Collection Management

 

Article 34　Where a unit operates through contracting, leasing, or affiliation, and the contractor, lessee, or affiliated person conducts business externally 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 is the taxpayer; in other circumstances, the contractor, lessee, or affiliated person is the taxpayer.

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

Article 35　Where a natural person engages in a taxable transaction that meets regulations, the domestic entity paying the price is the withholding agent. The specific operational measures for withholding and remitting shall be formulated by the finance and tax authorities under the State Council.

Where an overseas unit or individual leases domestic real estate to a natural person and there is a domestic agent, the domestic agent shall file and pay the tax.

Article 36　Unless otherwise provided in these Regulations, where the annual VAT-taxable sales amount of a unit or individual industrial and commercial household exceeds the threshold for small-scale taxpayers, it shall register as a general taxpayer with the competent tax authority and calculate and pay VAT using the general tax calculation method from the current period in which it exceeds the small-scale taxpayer threshold.

If a small-scale taxpayer meets the provisions of Article 9, Paragraph 2 of the VAT Law, it may register as a general taxpayer with the competent tax authority and, from the current period of registration, calculate and pay VAT according to the general tax calculation method.

After a taxpayer is registered as a general taxpayer, it may not be converted into a small-scale taxpayer.

Article 37　If a taxpayer has a taxable transaction, it shall issue an invoice to the purchaser. Under any of the following circumstances, a VAT special invoice shall not be issued:

(1) The purchaser in a taxable transaction is an individual;

(II) VAT exemption for taxable transactions;

(3) Other circumstances prescribed by the finance and tax competent departments of the State Council.

Article 38　If, after a taxpayer has a taxable transaction and issues a VAT special invoice, circumstances such as incorrect invoicing, sales discount, suspension, or return occur, it shall handle voiding or issue a red-letter VAT special invoice in accordance with the provisions of the competent tax department of the State Council; if it fails to handle voiding or issue a red-letter VAT special invoice according to provisions, it shall not deduct output VAT or sales amount in accordance with Articles 13 and 14 of these Regulations.

Article 39　The term "receipt of sales proceeds" as mentioned in Article 28, Paragraph 1, Item 1 of the VAT Law refers to the receipt of proceeds during or after the occurrence of a taxable transaction by a taxpayer; the date on which the document entitling the collection of sales proceeds is obtained refers to the payment date specified in the written contract, or, if no written contract has been signed or the written contract does not specify a payment date, the date on which the taxable transaction is completed, i.e., the date on which the goods are dispatched, the services are completed, the ownership of financial products is transferred, the transfer of intangible assets is completed, or the transfer of immovable property is completed.

Article 40　The date on which a deemed taxable transaction is completed as mentioned in Article 28, Paragraph 1, Item 2 of the VAT Law refers to the date on which the goods are dispatched, the ownership of financial products is transferred, the transfer of intangible assets is completed, or the transfer of immovable property is completed.

Article 41　If a taxpayer exports goods and the customs declaration export date is earlier than the time when the tax obligation arises as specified in Article 28, Paragraph 1, Items 1 and 2 of the VAT Law, the time when the tax obligation arises shall be the day the goods are declared for export.

Article 42　The provision in Article 29, Item 1 of the VAT Law that, upon approval by the competent finance and tax authorities at or above the provincial level, the head office may file and pay tax on a consolidated basis means: for taxpayers with a fixed place of production and operation, if the head office and branches are not in the same province (autonomous region or municipality directly under the Central Government), upon approval by the competent finance and tax authorities of the State Council, the head office may file and pay tax on a consolidated basis with the competent tax authority where the head office is located; if the head office and branches are 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 competent finance and tax authorities of the province (autonomous region or municipality directly under the Central Government), the head office may file and pay tax on a consolidated basis with the competent tax authority where the head office is located.

Article 43　The following taxpayers may apply the provision in Article 30 of the VAT Law that one quarter is one tax calculation period:

(1) Small-scale taxpayers;

(2) Banks, finance companies, trust companies, and credit cooperatives among general taxpayers;

(3) Other taxpayers determined by the competent tax and finance departments of the State Council.

Article 44　Taxpayers who pay tax on a per-transaction basis and whose sales amount reaches the threshold shall file and pay tax from the date the tax obligation arises until June 30 of the following year.

Article 45　Tax shall be prepaid according to regulations in the following circumstances:

(1) Providing construction services across prefecture-level administrative regions (counties and districts under municipalities directly under the Central Government);

(II) Providing construction services by way of advance receipt;

(3) Selling real estate projects by pre-sale;

(4) Transferring or leasing real estate not located in the same county (city, district, banner) as the taxpayer's institution location;

(5) Services related to the sale of crude oil and natural gas across provinces, autonomous regions, and municipalities directly under the Central Government by oil and gas field enterprises.

The specific operational measures for tax prepayment as stipulated in the first paragraph of this Article shall be formulated by the finance and tax authorities under the State Council.

Article 46　Where the provincial or higher finance and tax authorities approve consolidated tax filing by the head office, the approving department may provide for tax prepayment by branches.

Article 47　If a taxpayer exports goods or cross-border sells services or intangible assets (hereinafter collectively referred to as export business) and files for tax refund (exemption) in accordance with Article 33 of the VAT Law, the refund (exemption) amount shall be calculated through the exemption, credit, and refund method or the exemption and refund method according to the export tax refund rate prescribed by the State Council, and the tax refund (exemption) shall be handled after review and approval by the tax authority.

The exemption, offset, and refund method means that VAT is exempted at the export stage, the corresponding input tax is offset against the VAT payable, and the unoffset portion is refunded; the exemption and refund method means that VAT is exempted at the export stage, and the corresponding input tax is refunded.

Article 48　For export business to which tax refund (exemption) or value-added tax exemption applies, a taxpayer shall file within the prescribed time limit; if it fails to file within the time limit, value-added tax shall be paid in accordance with the provisions on deemed domestic sales.

If a taxpayer exports goods by entrustment, it shall complete the entrusted agency export procedures in accordance with the provisions of the competent tax department of the State Council. The entrusting party shall file for export tax refund (exemption), VAT exemption, or pay VAT according to provisions; if the entrusted agency export procedures have not been completed, the consignor of the exported goods shall file and pay VAT according to provisions.

Article 49　For export business to which tax refund (exemption) applies, a taxpayer may waive the tax refund (exemption) and choose value-added tax exemption or payment of value-added tax; from the month following the date of waiving the tax refund (exemption), value-added tax shall be exempted or paid in accordance with regulations for export business to which tax refund (exemption) applies.

For export business to which value-added tax exemption applies, a taxpayer may waive the value-added tax exemption and choose to pay value-added tax; from the month following the date of waiving the value-added tax exemption, value-added tax shall be paid in accordance with regulations for export business to which value-added tax exemption applies.

Where a taxpayer waives the refund (exemption) or VAT exemption for an export business, it may not apply the refund (exemption) or VAT exemption again within 36 months.

Article 50　Where export business subject to tax refund (exemption) involves sales allowances, suspension, or returns, taxpayers shall repay the refunded (exempted) tax.

Article 51　The specific operational measures for VAT export refund (exemption) shall be formulated by the finance and tax authorities under the State Council.

Article 52　Tax authorities may obtain information related to export tax collection and administration, such as logistics, customs declaration, freight forwarding, and fund settlement, from relevant units and individuals in accordance with the law, and relevant units and individuals shall provide it. Tax authorities and their staff shall keep relevant information confidential and shall not use it for purposes other than tax collection and administration. Where laws and administrative regulations provide otherwise, those provisions shall prevail.

Article 53　Where a taxpayer implements an arrangement without reasonable commercial purpose to reduce, exempt, or defer the payment of VAT, or to obtain an early tax refund or a larger tax refund, the tax authority may, in accordance with "Tax Collection and Administration Law of the People's Republic of China" and adjusted in accordance with the provisions of relevant administrative regulations.

 

Chapter 6 Supplementary Provisions

 

Article 54　These Regulations take effect on January 1, 2026.