How vat / sales tax works in China
Chinese VAT runs at 13% on most goods and imports, 9% on transport, construction, real estate, and farm goods, and 6% on modern services, finance, and intangibles, with exports zero-rated.
Taxpayers split into general taxpayers above RMB 5 million of annual sales with full input credits, and small-scale taxpayers on simplified levies with a temporary 1% rate through December 2027.
A consolidated VAT Law took effect on January 1, 2026, keeping the three rates while resetting administration, and fapiao invoicing remains the backbone of credits and refunds.
Tax rates at a glance
- Standard VAT
- 13%
- Reduced VAT transport
- 9%
- Reduced VAT services
- 6%
- Exports
- 0%
- General taxpayer line
- RMB 5 million
- Small-scale temporary
- 1%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersManufacturersSaaS foundersExpatsCross-border traders
Watch out for
- The January 2026 VAT Law keeps rates but changes administration, so 2025-era filing guides and fapiao procedures need revalidation rather than reuse.
- General versus small-scale status decides credit rights, invoice types, and customer acceptance, which makes the RMB 5 million line a strategic choice rather than a formality.
- Export zero-rating with refunds rewards documentation discipline, while cross-border services consumed offshore need careful place-of-supply evidence.
- Consumption tax on luxury goods, real-estate holding taxes, and stamp duty sit outside VAT and surprise newcomers who budget only the three headline rates.
Frequently asked questions
What are China's VAT rates?
China applies 13% standard VAT on goods, 9% on transport, construction, and farm goods, and 6% on modern services, with zero-rating for exports. A new VAT Law took effect January 1, 2026.
What is the difference between general and small-scale taxpayers?
General taxpayers above RMB 5 million of annual sales use standard rates with full input credits. Small-scale taxpayers use simplified levies, temporarily 1% for qualifying sales through December 2027.
How does fapiao invoicing affect VAT?
Special VAT fapiao support input-credit claims and refunds, so buyers need compliant invoices from registered suppliers. Invoice type and authenticity checks are central to audits.