Law of the People's Republic of China on Value-Added Tax (VAT)
(Adopted at the Thirteenth Meeting of the Standing Committee of the Fourteenth National People's Congress on December 25, 2024)
Table of Contents
Chapter 1 General Provisions
Chapter 2 Tax Rates
Chapter 3 Tax Payable Amounts
Chapter 4 Tax Benefits
Chapter 5 Collection Management
Chapter 6 Supplementary Provisions
Chapter 1 General Provisions
Article 1 This Law is enacted for the purpose of perfecting the value-added tax (VAT) system that is conducive to high-quality development, regulating the collection and payment of VAT, and protecting the legitimate rights and interests of taxpayers.
Article 2 The work of value-added tax (VAT) collection shall implement the Party and the State's line policies, decisions and deployments, and serve the national economy and social development.
Article 3 Units and individuals (including individual industrial and commercial households) that sell goods, services, intangible assets and real estate (hereinafter referred to as taxable transactions) within the territory of the People's Republic of China (hereinafter referred to as the territory), as well as those that import goods, are taxpayers of value-added tax (VAT), and shall pay VAT in accordance with the provisions of this Law.
The sale of goods, services, intangible assets and immovable property refers to the transfer of ownership of goods and immovable property for a fee, the provision of services for a fee, and the transfer of ownership of intangible assets or the right to use them for a fee.
Article 4 A taxable transaction occurring within the territory refers to the following cases:
(1) In the case of the sale of goods, the place of origin or location of the goods is within the territory;
(2) In the case of the sale or lease of immovable property or the transfer of the right of use of natural resources, the location of immovable property or natural resources is within the territory;
(3) In the case of the sale of financial commodities, the financial commodities are issued within the territory, or the seller is a domestic unit. issue, or the seller is a unit or individual in the territory;
(4) except for the provisions of the second and third subparagraphs of this Article, in the case of the sale of services or intangible assets, the services or intangible assets are consumed in the territory, or the seller is a unit or individual in the territory.
Article 5 Any of the following circumstances shall be regarded as a taxable transaction and shall be subject to value-added tax in accordance with the provisions of this Law:
(1) Units and individual industrial and commercial enterprises use self-produced or commissioned-processed goods for collective welfare or for personal consumption;
(2) Units and individual industrial and commercial enterprises transfer goods for no consideration;
(3) Units and individuals transfer for no consideration intangible assets, real estate or financial commodities.
Article 6 Any of the following circumstances shall not be taxable transactions and shall not be subject to value-added tax:
(1) Employees providing services for the employed unit or employer for obtaining wages or salaries;
(2) Collecting administrative fees and governmental funds;
(3) Obtaining compensation for being expropriated or confiscated in accordance with the provisions of the law;
(4) Obtaining interest income on deposits. (D) obtaining interest income on deposits.
Article 7 Value-added tax (VAT) is an out-of-the-money tax and the sales of taxable transactions do not include the amount of VAT. The amount of value-added tax shall be separately stated on the transaction vouchers in accordance with the provisions of the State Council.
Article 8 Taxpayers who engage in taxable transactions shall calculate and pay the value-added tax in accordance with the general method of taxation by calculating the tax payable through the offset of input tax against output tax; except as otherwise provided in this Law.
Small taxpayers may calculate and pay the value-added tax in accordance with the simplified tax calculation method of calculating the taxable amount based on the sales amount and the levy rate.
The method of calculating the value-added tax for Chinese-foreign cooperative exploitation of marine petroleum and natural gas, etc., shall be implemented in accordance with the relevant provisions of the State Council.
Article 9 A small-scale taxpayer referred to in this Law means a taxpayer whose annual assessable VAT sales do not exceed five million yuan.
Small-scale taxpayers with sound accounting and able to provide accurate tax information may register with the competent tax authorities and calculate and pay value-added tax in accordance with the general method of tax calculation stipulated in this Law.
In accordance with the needs of the national economy and social development, the State Council may make adjustments to the standards for small-scale taxpayers and report them to the Standing Committee of the National People's Congress for the record.
Chapter II Tax Rates
Article 10 Value-added Tax Rates:
(1) A taxpayer shall be subject to a tax rate of thirteen percent (13%) for the sale of goods, processing, repair and repair services, and leasing services of tangible movable assets, and the importation of goods, except as provided for in Items 2, 4, and 5 of this Article.
(2) Taxpayers selling transportation, postal services, basic telecommunications, construction, real estate leasing services, selling real estate, transferring the right to use land, and selling or importing the following goods, except as provided for in the fourth and fifth subparagraphs of this Article, shall be subject to a tax rate of nine percent:
1. Agricultural products, edible vegetable oils, and edible salts;
2. Tap water, heating, air-conditioning, hot water Gas, liquefied petroleum gas, natural gas, dimethyl ether, biogas, coal products for residential use;
3. Books, newspapers, magazines, audio-visual products, electronic publications;
4. Feedstuffs, chemical fertilizers, pesticides, agricultural machinery, and agricultural films.
(3) Taxpayers selling services and intangible assets shall be subject to a tax rate of six percent, except as provided for in the first, second and fifth subparagraphs of this Article.
(4) Taxpayers exporting goods shall be subject to a tax rate of zero percent; except as otherwise provided by the State Council.
(e) The tax rate for cross-border sales of services and intangible assets within the scope of the State Council's regulations by domestic units and individuals shall be zero percent.
Article 11 The levy rate for the payment of value-added tax calculated by applying the simplified tax method is three percent.
Article 12 Where a taxpayer has two or more taxable transactions involving different tax rates or levy rates, he shall separately account for the sales to which the different tax rates or levy rates are applicable; if not separately accounted for, the tax rate shall be applied from the higher one.
Article 13 Where a taxable transaction involves more than two tax rates, the tax rate shall be applied in accordance with the main business of the taxable transaction.
Chapter III Taxable Amount
Article 14 Where the payment of value-added tax is calculated in accordance with the general method of taxation, the taxable amount shall be the balance of the output tax for the current period after deducting the input tax for the current period.
Where the payment of value-added tax is calculated in accordance with the simplified method of taxation, the taxable amount shall be the current sales multiplied by the levy rate.
Imported goods shall be subject to value-added tax calculated in accordance with the constituent taxable price stipulated in this Law multiplied by the applicable tax rate. The constituent taxable price shall be the customs duty taxable price plus customs duty and consumption tax; if the State Council provides otherwise, it shall follow its provisions.
Article 15 Foreign units and individuals in the territory of the taxable transactions, the purchaser as the withholding obligation; in accordance with the provisions of the State Council to entrust the domestic agent to declare and pay the tax, except.
Where a withholding agent withholds tax in accordance with the provisions of this Law, the amount of tax to be withheld shall be calculated by multiplying the sales amount by the tax rate.
Article 16 The amount of output tax refers to the amount of value-added tax calculated according to the sales amount multiplied by the tax rate stipulated in this Law when a taxable transaction is carried out by a taxpayer.
Input tax refers to the amount of value-added tax paid or borne by a taxpayer on the purchase of goods, services, intangible assets and real estate.
Taxpayers shall offset input tax from output tax with the VAT deduction vouchers prescribed by laws, administrative regulations or the State Council.
Article 17 Sales amount refers to the price associated with a taxable transaction made by a taxpayer, including all the prices corresponding to economic benefits in monetary and non-monetary forms, excluding the output tax amount calculated in accordance with the general method of tax calculation and the tax payable calculated in accordance with the simplified method of tax calculation.
Article 18 Sales are calculated in RMB. Where a taxpayer settles sales in currencies other than RMB, it shall be converted into RMB.
Article 19 In the event of deemed taxable transactions as stipulated in Article 5 of this Law and where the sales are in non-monetary form, the taxpayer shall determine the sales in accordance with the market price.
Article 20 If the sales amount is obviously low or high without justifiable reasons, the tax authorities may approve the sales amount in accordance with the provisions of the Law of the People's Republic of China on Administration of Tax Collection and the relevant administrative regulations.
Article 21 If the current input tax is greater than the current output tax, the taxpayer may, in accordance with the provisions of the State Council, choose to carry forward to the next period to continue to offset or apply for refund.
Article 22 The following input tax amounts of a taxpayer shall not be deducted from its output tax amount:
(1) Input tax amount corresponding to items subject to the simplified tax calculation method;
(2) Input tax amount corresponding to value-added tax exempted items;
(3) Input tax amount corresponding to items subject to abnormal losses;
(4) Goods purchased for collective welfare or personal consumption. (d) input tax corresponding to goods, services, intangible assets and real estate purchased and used for collective welfare or personal consumption;
(e) input tax corresponding to food and beverage services, residents' daily services and entertainment services purchased and used directly for consumption;
(f) other input tax prescribed by the State Council.
Chapter IV Tax Preferences
Article 23 Small-scale taxpayers shall be exempted from value-added tax (VAT) if they engage in taxable transactions and their sales do not reach the threshold; if the threshold is reached, they shall calculate and pay the full amount of VAT in accordance with the provisions of this Law.
The standards for the starting point provided for in the preceding paragraph shall be prescribed by the State Council and reported to the Standing Committee of the National People's Congress for the record.
Article 24 The following items are exempted from value-added tax:
(1) the sale of self-produced agricultural products by agricultural producers, agricultural mechanization, drainage and irrigation, pest control, plant protection, agricultural and animal husbandry insurance as well as the related technical training business, and the mating and disease prevention and control of poultry, livestock, and aquatic animals;
(2) medical services provided by medical institutions;
(3) the sale by natural persons of ) antique and old books, articles sold by natural persons for their own use;
(iv) imported instruments and equipment directly used for scientific research, scientific experiments and teaching;
(v) imported materials and equipment freely assisted by foreign governments and international organizations;
(vi) articles directly imported by organizations of disabled persons for the exclusive use of disabled persons, and services provided by disabled persons personally;
(vii) childcare services provided by childcare centers, kindergartens, nursing homes, and service institutions for the disabled, marriage introduction services, and funeral services;
(viii) academic education services provided by schools, and services provided by students working and studying;
(ix) memorial halls, museums, cultural centers, management institutions of cultural relics preservation units, art galleries, exhibition halls, and painting and calligraphy institutes, libraries for organizing cultural activities, admission revenue from religious places for organizing cultural and religious activities.
The specific standards for the tax-exempted items stipulated in the preceding paragraph shall be prescribed by the State Council.
Article 25 According to the needs of the national economy and social development, the State Council may formulate special preferential policies on value-added tax to support the development of small and micro-enterprises, to support key industries, to encourage innovation, entrepreneurship and employment, and to donate to public welfare undertakings, etc. The State Council shall report such policies to the Standing Committee of the National People's Congress for the record.
The State Council shall evaluate and adjust the preferential policies on value-added tax in due course.
Article 26 Taxpayers who are also engaged in value-added tax preferential projects shall separately account for the sales of the value-added tax preferential projects; projects which are not separately accounted for shall not enjoy tax preferences.
Article 27 A taxpayer may renounce the value-added tax preferences; if he renounces the preferences, he shall not be entitled to the tax preferences within thirty-six months, except for small-scale taxpayers.
Chapter V Collection Management
Article 28 The time of occurrence of value-added tax obligation shall be determined in accordance with the following provisions:
(1) In case of a taxable transaction, the time of occurrence of the tax obligation shall be the date of receipt of the sales proceeds or the obtaining of the sales proceeds requesting documents; if an invoice is issued first, it shall be the date of the issuance of the invoice.
(2) the occurrence of deemed taxable transactions, the time of occurrence of tax obligations for the completion of the deemed taxable transactions.
(3) For imported goods, the time of incurring tax obligation is the day when the goods are declared for import.
The time of occurrence of VAT withholding obligation is the day when the taxpayer's VAT obligation occurs.
Article 29 The place of payment of value-added tax shall be determined in accordance with the following provisions:
(1) A taxpayer with a fixed place of production and operation shall declare tax to the competent tax authorities of the place where the taxpayer's organization is located or where the taxpayer resides. The head office and branches are not in the same county (city), should be separately to their respective locations of the competent tax authorities to declare taxes; by the provincial level or above, approved by the competent departments of finance and taxation, can be summarized by the head office to the head office of the competent tax authorities to declare taxes.
(2) taxpayers without fixed production and business premises, shall declare taxes to the competent tax authorities in the place where the taxable transaction occurs; failure to declare taxes, by the competent tax authorities in the place where the organization is located or the place where the taxpayer resides to make up for the taxes levied.
(3) A natural person who sells or leases real estate, transfers the right to use natural resources, or provides construction services shall declare taxes to the competent tax authorities where the real estate is located, where the natural resources are located, or where the construction services occur.
(4) Taxpayers importing goods shall declare their taxes at the place specified by the Customs.
(e) A withholding agent shall declare and pay the withheld tax to the competent tax authority of the place where its organization is located or where it resides; if the location of its organization or place of residence is outside the country, it shall declare and pay the withheld tax to the competent tax authority of the place where the taxable transaction takes place.
Article 30 The taxable period for value-added tax shall be ten days, fifteen days, one month or one quarter. The specific taxable period of a taxpayer shall be approved by the competent tax authorities according to the size of the taxable amount of the taxpayer. Taxpayers with infrequent taxable transactions may pay tax on a per-tax basis.
If a taxpayer takes a month or a quarter as a taxable period, he/she shall declare his/her tax liability within fifteen days from the date of expiration of the period; if he/she takes ten days or fifteen days as a taxable period, he/she shall declare his/her tax liability within fifteen days from the first day of the following month.
The taxable period and the deadline for tax declaration for the withholding agent to release the tax shall be implemented in accordance with the preceding two paragraphs.
Taxpayers importing goods shall declare and pay taxes in accordance with the deadlines set by the Customs.
Article 31 If a taxpayer takes ten or fifteen days as a taxable period, he shall pay the tax in advance within five days from the date of expiration of the period.
Where laws and administrative regulations provide otherwise for taxpayers to make advance payment of tax, such provisions shall apply.
Article 32 Value-added tax (VAT) shall be collected by the tax authorities, and VAT on imported goods shall be collected by the Customs on behalf of the taxpayers.
The Customs shall provide the tax authorities with information on the collection of value-added tax on behalf of the taxpayer and the customs declaration of the export of goods.
Methods for calculating the value-added tax on goods brought into the country by individuals or sent by mail shall be formulated by the State Council and reported to the Standing Committee of the National People's Congress for the record.
Article 33 If a taxpayer exports goods or sells services or intangible assets across the border and applies a zero tax rate, he shall declare to the competent tax authorities for tax refund (exemption). The specific measures for export tax refund (exemption) shall be formulated by the State Council.
Article 34 Taxpayers shall issue and use value-added tax invoices in accordance with law. Value-added tax invoices include paper invoices and electronic invoices. Electronic invoices and paper invoices have the same legal effect.
The State actively promotes the use of electronic invoices.
Article 35 The tax authorities and the departments of industry and information technology, public security, customs, market supervision and administration, the People's Bank of China, and financial supervision and administration shall establish a mechanism for sharing value-added tax-related information and a mechanism for work coordination.
Related departments shall, in accordance with laws and administrative regulations and within their respective scope of duties, support and assist the tax authorities in the administration of value-added tax collection.
Article 36 The collection and management of value-added tax shall be carried out in accordance with the provisions of this Law and the Law of the People's Republic of China on Tax Collection and Management.
Article 37 Taxpayers, withholding agents, tax authorities and their staff who violate the provisions of this Law shall be held legally responsible in accordance with the Law of the People's Republic of China on Administration of Tax Collection and the provisions of relevant laws and administrative regulations.
Chapter VI Supplementary Provisions
Article 38 This Law shall come into force on January 1, 2026, and shall be applied as of the same date. The Provisional Regulations of the People's Republic of China on Value-Added Tax shall be repealed at the same time.
