On December 30, Premier Li Qiang of the State Council signed a decree of the State Council to promulgate the Regulations on the Implementation of the Value-added Tax Law of the People's Republic of China (hereinafter referred to as the Regulations), which will come into effect on January 1, 2026.
The Regulation aims to implement the value-added tax Law of the People's Republic of China. It consists of six chapters and 54 articles, mainly detailing taxpayers and the scope of taxation, clarifying the application of tax rates, determining the calculation method of tax payable in different situations, improving tax preferences and improving tax collection and management measures.
The original text is as follows:
Order
of the State Council of the People's Republic of China No.826
The Regulations on the Implementation of the Value Added Tax Law of the People's Republic of China, which were adopted at the 75th executive meeting of the State Council on December 19, 2025, are hereby promulgated. Effective as of January 1, 2026.
Premier's Li Qiang
December 25
, 2025 Regulations for
the Implementation of the value-added tax Law of the People's Republic of China Chapter I General Provisions
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 value-added tax Law). Article
2 The term "goods" as mentioned in Article 3 of the Value Added Tax Law includes tangible movable property, electric power, heat, gas, etc. The services referred to in Article 3 of the
VAT Law include 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, certification and consulting services. The term "intangible assets" as mentioned in Article 3 of the
Value Added Tax Law refers to assets that have no physical form but can bring economic benefits, including technologies, trademarks, copyrights, goodwill, the right to use natural resources and other intangible assets. The term "immovable property" as mentioned in Article 3 of the
Value Added Tax Law refers to assets that cannot be moved or whose nature and shape will be changed after being moved, including buildings and structures. The competent departments of
finance and taxation under the State Council shall propose the specific scope of goods, services, intangible assets and real estate, which shall be promulgated and implemented after being submitted to the State Council for approval. Article
3 The units referred to in Article 3 of the VAT Law include enterprises, administrative organs, institutions, military units, social organizations and other units. The term "individuals" as mentioned in Article 3 of the
Value Added Tax Law includes individual businesses and natural persons. Article
4 The term "domestic consumption of services or intangible assets" as mentioned in Item 4 of Article 4 of the VAT Law refers to the following circumstances:
(1) Overseas units or individuals sell services or intangible assets to domestic units or individuals, except for services consumed on the spot abroad;
(2) The services and intangible assets sold by overseas units or individuals are directly related to the goods, real estate and natural resources in China;
(3) Other circumstances stipulated by the competent financial and tax departments of the State Council. Article
5 When a taxpayer issues a special invoice for value-added tax, the sales amount and the amount of value-added tax tax shall be listed separately.Article
6 The taxpayer who applies the general tax calculation method is the general taxpayer.
General taxpayers shall be subject to a registration system, and the specific registration measures shall be formulated by the competent tax authorities under the State Council. Article
7 Natural persons belong to small-scale taxpayers. Non-enterprise units whose taxable transactions do not occur frequently and whose main business does not fall within the scope of taxable transactions may choose to pay taxes according to small-scale taxpayers. Chapter
II Tax Rates
Article 8 The term "export goods" mentioned in item 4 of Article 10 of the VAT Law refers to goods declared at the Customs that actually leave the country and are sold to units or individuals outside the country, as well as goods that are regarded as exports by the State Council. Article
9 When a domestic entity or individual sells the following services or intangible assets across the border, 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 services sold to overseas units for complete consumption abroad;
(2) Technology transferred to units outside the territory of China for use entirely outside the territory of China;
(3) International transportation services, space transportation services, and foreign repair and replacement services. Article
10 The taxable transaction referred to in Article 13 of the VAT Law shall meet the following conditions at the same time:
(1) It includes two or more businesses involving different tax rates and levy rates;
(2) There is an obvious relationship between the businesses. The main business is in the main position, reflecting the essence and purpose of the transaction; the subsidiary business is the necessary supplement to the main business, and is based on the occurrence of the main business. Chapter
III Tax
PayableArticle 11 The tax deduction vouchers for value-added tax mentioned in Article 16 of the VAT Law shall comply with the relevant provisions of the competent tax authorities under the State Council. Specifically, it includes special invoices for value-added tax, special payment forms for customs import value-added tax, tax payment vouchers, purchase invoices for agricultural products, sales invoices for agricultural products and other tax deduction vouchers with the function of input tax deduction. Article
12 The input tax amount to be deducted by a taxpayer from the output tax amount on the basis of the tax deduction certificate of the value-added tax shall include:
(1) the amount of value-added tax tax listed on the special invoice for value-added tax obtained from the seller;
(2) The amount of value-added tax tax listed on the special payment certificate for imported value-added tax obtained from the customs;
(3) The amount of value-added tax tax listed on the tax payment certificate obtained from overseas units or individuals for purchasing services, intangible assets or domestic real estate;
(4) input tax calculated on the basis of invoices for purchasing or sales of agricultural products, except for obtaining special invoices for value-added tax or special certificates of payment of imported value-added tax, when purchasing agricultural products, unless otherwise stipulated by the State Council;
(5) The amount of value-added tax tax listed or included in other value-added tax tax deduction vouchers obtained from the seller.Article
13 Where a taxpayer calculates and pays value-added tax according to the general tax calculation method, the amount of value-added tax tax returned to the purchaser due to sales discount, suspension or refund shall be deducted from the current output tax; The amount of value-added tax tax recovered as a result of sales discount, suspension or refund shall be deducted from the input tax of the current period. Article
14 Where a taxpayer calculates and pays value-added tax according to the simplified tax calculation method, the sales amount returned to the purchaser due to sales allowances, suspension or refund shall be deducted from the sales amount of the current period. If there is still overpaid tax after deducting the sales amount of the current period, it may be deducted from the future tax payable or apply for refund in accordance with the provisions. Article
15 The term "total price" as mentioned in Article 17 of the VAT Law does not include the following taxes or fees collected by the taxpayer on behalf of the taxpayer:
(1) Government funds or administrative fees; Consumption tax on consumer goods subject to consumption tax upon
entrusted processing;
vehicle purchase tax and vehicle and vessel tax;
and money collected on behalf of the principal by issuing invoices in the name of the principal. Article
16 For taxpayers adopting the pricing method for combining the sales amount and the value-added tax tax amount, The sales amount shall be calculated according to the following formula:
sales amount of general tax calculation method = sales amount including tax ÷ (1 + tax rate)
sales amount of simple tax calculation method = sales amount including tax ÷ (1 + levy rate)
Article 17 Where a taxpayer settles the sales amount in a currency other than RMB, when converting it into RMB, the conversion rate may be the middle price of the RMB exchange rate effective on the day when the sales amount occurs or on the first day of the month. After the taxpayer determines the conversion rate, it shall not be changed within 12 months. Article
18 Where a taxpayer is under any of the circumstances as prescribed in Article 20 of the VAT Law, the tax authorities may determine the sales amount in accordance with the following methods in order:
(1) It shall be determined according to the average price of the same kind of goods, services, intangible assets or immovable properties sold by the taxpayer in the recent period;
(2) It shall be determined according to the average price of the same kind of goods, services, intangible assets or immovable properties sold by other taxpayers in the recent period;
(3) It shall be determined according to the composite taxable price. The formula for composition of assessable price is:
Composition assessable price = cost X (1 + cost profit rate) + Consumption Tax
. In the formula, the cost profit rate is 10%. The competent tax department under the State Council may adjust the cost profit rate according to the actual cost profit situation of the industry. Article
19 The term "abnormal loss" as mentioned in Item 3 of Article 22 of the VAT Law refers to the theft, loss, mildew and deterioration of goods due to poor management, as well as the confiscation, destruction and demolition of goods or real estate due to violation of laws and regulations.The items of abnormal losses referred to in Item 3 of Article 22 of the
Value Added Tax Law include:
(1) Goods purchased with abnormal losses, as well as related processing, repair and replacement services and transportation services; Goods purchased (excluding fixed assets), services for processing, repair and replacement, and transportation services consumed by work-in-progress or finished products of
abnormal loss;
(3) Immovable properties of abnormal loss, and goods purchased and construction services consumed by the said immovable properties;
(4) Purchased goods and construction services consumed in the construction of real estate with abnormal losses. Real estate projects under construction include real estate newly built, rebuilt, expanded, repaired and decorated by taxpayers. Goods referred to in subparagraphs (3) and (4) of paragraph 2 of
this Article mean materials and equipment that constitute the entity of immovable property. Including building decoration materials and water supply and drainage, heating, sanitation, ventilation, lighting, communications, gas, fire control, central air conditioning, elevators, electricity, https://www.databm.
the fixed assets referred to in these Regulations. It refers to machines, machinery, transportation tools and other equipment, tools and appliances related to production and operation with a service life of more than 12 months. Article
20 The social entertainment consumption of a taxpayer belongs to the personal consumption referred to in the VAT Law. Article
21 The corresponding input tax shall not be deducted from the output tax for the time being for the interest expenditure of the taxpayer's purchase of loan services and the investment and financing advisory fees, handling fees, consulting fees and other expenses directly related to the loan services paid to the lender. The competent financial and taxation departments
under the State Council shall timely study and evaluate the input tax corresponding to the interest on purchasing loan services and related expenses, and shall not deduct the effect of the implementation of the policy from the output tax. Article
22 Taxpayers shall purchase goods, services, intangible assets and real estate for non-taxable transactions (hereinafter referred to as non-deductible non-taxable transactions) that meet the following conditions at the same time. The corresponding input tax shall not be deducted from the output tax:
(1) Business activities other than those specified in Articles 3 to 5 of the VAT Law occur, and monetary or non-monetary economic benefits related to them are obtained;
(2) It does not fall under the circumstances specified in Article 6 of the VAT Law. Article
23 Where a general taxpayer purchases goods (excluding fixed assets) and services for the purpose of simple tax calculation, exemption from value-added tax and non-deductible non-taxable transactions, and cannot divide the amount of non-deductible input tax, the tax authorities shall pay the tax amount of the tax. The non-deductible input tax shall be calculated on a period-by-period basis according to the proportion of sales or income, and the annual summary and liquidation shall be carried out within the tax declaration period of January of the following year. Article
24 Where the purchase of goods (excluding fixed assets) and services for which the input tax has been deducted occurs under the circumstances specified in Items 3 to 5 of Article 22 of the VAT Law, the corresponding input tax shall be deducted from the current input tax; If the corresponding input tax cannot be determined, the input tax to be deducted shall be calculated according to the actual cost of the current period. Article
25 Fixed assets, intangible assets or immovable property (hereinafter referred to as long-term assets) acquired by a general taxpayer shall be used not only for the taxable items of the general taxation method, but also for the fixed assets, intangible assets or immovable property. Those who are also used for simple tax calculation, exemption from value-added tax, non-taxable transactions, collective welfare or personal consumption (hereinafter referred to as five categories of non-allowable deduction items) belong to long-term assets used for mixed purposes. 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 tax may be deducted in full from the output tax;
(2) For a single long-term asset with an original value of more than 5 million yuan, the input tax shall be deducted in full at the time of purchase, and then during the period of mixed use, the input tax that cannot be deducted from the output tax corresponding to the five categories of non-deductible items shall be calculated according to the adjustment period and adjusted year by year. The specific operational measures for the input tax credit on
long-term assets shall be formulated by the competent financial and tax departments of the State Council.Chapter
IV Preferential Tax
TreatmentArticle 26 The term "agricultural producers" mentioned in Article 24, paragraph 1, item 1 of the Value Added Tax Law refers to units and individuals engaged in agricultural production; and the term "agricultural products" refers to primary agricultural products. Article
27 The term "medical institution" as mentioned in Item 2 of Paragraph 1 of Article 24 of the VAT Law refers to an institution established in accordance with the relevant provisions with the qualification of practicing as a medical institution, including all kinds of medical institutions at all levels of the army and the armed police force, excluding for-profit cosmetic medical institutions. Article
28 The term "antique books" mentioned in Item 3 of Paragraph 1 of Article 24 of the Value Added Tax Law refers to antique books and used books purchased from the public. Article
29 The nurseries and kindergartens referred to in Item 7 of the first paragraph of Article 24 of the VAT Law refer to the institutions established in accordance with the relevant provisions that have obtained the qualifications for nursery or preschool education, and the income exempted from value-added tax refers to the nursery fees and nursery education fees within the relevant fee standards; Old-age institutions refer to all kinds of old-age institutions established in accordance with relevant provisions to provide centralized accommodation and care services for the elderly; service institutions for the disabled refer to institutions established in accordance with relevant provisions to provide relevant services for the disabled. Article
30 The term "school" as mentioned in Item 8 of Paragraph 1 of Article 24 of the VAT Law refers to an institution established in accordance with the relevant provisions to provide education for academic qualifications, as well as a technical school, a senior technical school and a technician college. Article
31 The term "ticket income" as mentioned in Item 9 of Paragraph 1 of Article 24 of the VAT Law refers to the income from the first ticket. Article
32 The scope of application, standards and conditions of preferential policies for value-added tax shall be made public to the public in a timely manner according to law. Article
33 The competent departments of finance and taxation under the State Council shall timely study and evaluate the implementation effect of preferential policies for value-added tax, and timely report to the State Council for adjustment and improvement of preferential policies that no longer meet the needs of national economic and social development. Chapter
V Collection and Management
Article 34 Where a unit operates in the form of contracting, leasing or affiliation, and the contractor, lessee or affiliated person operates in the name of the employer, lessor or affiliated person, and the employer, lessor or affiliated person assumes relevant legal liabilit ies, the unit shall be subject to the relevant provisions of the law. The Employer, the lessor and the affiliated party shall be the taxpayer; in other cases, the Contractor, the lessee and the affiliated party shall be the taxpayer. For taxable transactions occurring during the operation of
asset management products, the manager of asset management products is the taxpayer. Where there are other provisions in the law, such provisions shall prevail. Article
35 When a natural person has a taxable transaction that meets the requirements, the domestic unit that pays the price shall be the withholding agent. The specific operational measures for withholding and remitting shall be formulated by the competent financial and tax departments under the State Council. Where
an overseas entity or individual leases a domestic real estate to a natural person and has a domestic agent, the domestic agent shall declare and pay taxes. Article
36 Except as otherwise provided in these Regulations, if the annual sales of value-added tax payable by units and individual industrial and commercial households exceed the standard of small-scale taxpayers, they shall register with the competent tax authorities as general taxpayers, and calculate and pay value-added tax according to the general tax calculation method from the current period when they exceed the standard of small-scale taxpayers.
Small-scale taxpayers who meet the provisions of the second paragraph of Article 9 of the VAT Law may register with the competent tax authorities as general taxpayers and calculate and pay value-added tax according to the general tax calculation method from the current period of registration.After
a taxpayer is registered as a general taxpayer, he shall not be converted to a small-scale taxpayer. Article
37 Taxpayers shall issue invoices to purchasers when they have taxable transactions. Under one of the following circumstances, no special invoice for value-added tax shall be issued:
(1) The purchaser of a taxable transaction is a natural person;
(2) a taxable transaction is exempt from value-added tax; and
(3) Other circumstances stipulated by the competent financial and tax departments of the State Council. Article
38 After a taxpayer has a taxable transaction and issues a special invoice for value-added tax, if the invoice is wrong or the sale is discounted, suspended or returned, it shall be invalidated or a special red-letter invoice for value-added tax shall be issued in accordance with the provisions of the competent tax department under the State Council; For those who fail to invalidate or draw up red-letter special invoices for value-added tax in accordance with the provisions, the output tax or sales amount shall not be deducted in accordance with the provisions of Articles 13 and 14 of these Regulations. Article
39 The term "received sales payment" as mentioned in Item 1 of Paragraph 1 of Article 28 of the VAT Law refers to the payment received by a taxpayer in the course of or after the completion of a taxable transaction; The date on which the receipt of the sales proceeds is obtained refers to the date of payment specified in the written contract. If no written contract has been signed or the date of payment has not been specified in the written contract, it refers to the date on which the taxable transaction is completed, that is, the date on which the goods are delivered, the services are completed, the ownership of financial commodities is transferred, the transfer of intangible assets is completed, or the transfer of real estate is completed. Article
40 The date on which the deemed taxable transaction is completed as mentioned in Item 2 of Paragraph 1 of Article 28 of the VAT Law refers to the date on which the goods are delivered, the ownership of financial commodities is transferred, the transfer of intangible assets is completed or the transfer of real estate is completed. Article
41 Where a taxpayer exports goods and the date of customs declaration for export is earlier than time of occurrence of the obligation to pay tax as provided in Item (1) and Item (2) of Paragraph 1 of Article 28 of the VAT Law, the time of occurrence of the obligation to pay tax shall be the day on which the goods are declared for export. Article
42 For the purpose of item (1) of Article 29 of the Value Added Tax Law, the term "the head office may file consolidated tax returns after being approved by the competent departments of finance and taxation at or above the provincial level" means taxpayers with fixed production and operation sites, if the head office and branch are not located in the same province (autonomous region, municipality directly under the Central Government), The head office may, upon the approval of the competent financial and tax departments under the State Council, report and pay tax on a consolidated basis with the local competent tax authorities where the head office is located; If a head office and a branch are located in the same province (autonomous region, municipality directly under the Central Government) but not in the same county (city, district, banner), the head office may, upon approval by the competent financial and tax authorities of the province (autonomous region, municipality directly under the Central Government), report and pay taxes on a consolidated basis to the competent tax authorities in the place where the head office is located. Article
43 The following taxpayers may apply the provisions of Article 30 of the Value Added Tax Law that a quarter shall be a tax period:
(1) Small-scale taxpayers;
(2) Banks, financial companies, trust companies and credit cooperatives among general taxpayers;
(3) Other taxpayers determined by the competent tax and financial departments under the State Council. Article
44 Taxpayers who pay tax on a time basis and whose sales amount reaches the threshold shall report and pay tax from the date of the occurrence of tax obligations to June 30 of the following year.Article
45 Under the following circumstances, taxes shall be paid in advance in accordance with the provisions:
(1) Providing construction services across prefecture-level administrative regions (counties and districts under the jurisdiction of municipalities directly under the Central Government);
(2) Providing construction services by means of advance payment;
(3) Sales of real estate projects in the form of pre-sale;
(4) Transfer or lease of real estate not located in the same county (city, district or banner) as the taxpayer's institution;
(5) Oil and gas field enterprises sell services related to the production of crude oil and natural gas across provinces, autonomous regions and municipalities directly under the Central Government. The specific procedures for the advance payment of tax as prescribed in the first paragraph of
this Article shall be formulated by the competent fiscal and tax departments under the State Council. Article
46 With the approval of the competent financial and tax authorities at or above the provincial level, the head office shall declare and pay taxes on a consolidated basis, and the approving department may stipulate that the branch office shall pay taxes in advance. Article
47 Taxpayers exporting goods or cross-border sales of services and intangible assets (hereinafter referred to as export business) shall apply for tax refund (exemption) in accordance with the provisions of Article 33 of the VAT Law. The amount of tax refund (exemption) shall be calculated through the method of tax exemption, credit and refund or the method of tax exemption and refund, and the tax refund (exemption) shall be handled after the examination and approval of the tax authorities. The
exemption, credit and refund method refers to the exemption of value-added tax in the export link, and the corresponding input tax is deducted from the payable value-added tax tax, and the part not deducted is refunded. The exemption and refund method refers to the exemption of value-added tax in the export link, and the corresponding input tax is refunded. Article
48 Taxpayers applying for export business of tax refund (exemption) or exemption from value-added tax shall declare within the prescribed time limit. If they fail to declare within the prescribed time limit, they shall pay value-added tax in accordance with the provisions on deemed domestic sales.
Taxpayers exporting goods on commission shall, in accordance with the provisions of the competent tax departments under the State Council, go through the export procedures on commission, and the commissioning party shall apply for export tax refund (exemption), exemption from value-added tax or payment of value-added tax in accordance with the provisions. If the export procedures are not completed on commission, the consignor of the export goods shall apply for and pay value-added tax in accordance with the provisions. Article
49 For the export business for which tax refund (exemption) is applicable, the taxpayer may waive the tax refund (exemption) and choose to be exempted from the value-added tax or pay the value-added tax. From the next month after the date of waiver of tax refund (exemption), the export business for which tax refund (exemption) is applicable shall be exempted from the value-added tax or pay the value-added tax in accordance with the provisions.
Taxpayers applying export business exempted from value-added tax may give up exemption from value-added tax and choose to pay value-added tax. From the month following the date of giving up exemption from value-added tax, VAT shall be paid in accordance with regulations for export business exempted from value-added tax.
Taxpayers who give up the export business of tax refund (exemption) or exemption from value-added tax shall not apply tax refund (exemption) or exemption from value-added tax again within 36 months. Article
50 Where the export business for tax refund (exemption) is subject to sales discount, suspension or refund, the taxpayer shall pay back the amount of tax refunded (exempted). Article
51 The specific implementing measures for export tax refund (exemption) of value-added tax shall be formulated by the competent financial and tax departments of the State Council. Article
52 Tax authorities may obtain information on logistics, customs declaration, cargo transport agency and fund settlement related to export tax collection and administration from relevant units and individuals according to law, and relevant units and individuals shall provide it. Tax authorities and their staff shall keep relevant information confidential and shall not be used for purposes other than tax collection and administration. Where there are other provisions in laws and administrative regulations, such provisions shall prevail.Article
53 Where a taxpayer reduces, exempts or postpones the payment of value-added tax tax, or refunds the tax in advance or refunds more than amount of tax due to the implementation of arrangements without reasonable commercial purposes, the tax authorities may make adjustments in accordance with the Law of the People's Republic of China on the Administration of Tax Collection and the provisions of relevant administrative regulations. Chapter
VI Supplementary Provisions
Article 54 These Regulations shall come into force as of January 1, 2026.
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