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

(Adopted at the 13th Meeting of the Standing Committee of the 14th National People's Congress on December 25, 2024)

Table of Contents
Chapter 1 General Provisions
Chapter 2: Tax Rates
Chapter 3: Taxable Amount
Chapter 4: Tax Incentives
Chapter 5: Collection and Management
Chapter VI Supplementary Provisions

Chapter 1 General Provisions

Article 1 　This Law is enacted to improve the value-added tax system in a way that promotes high-quality development, standardizes the collection and payment of value-added tax, and safeguards the legitimate rights and interests of taxpayers.

Article 2 　Value-added tax collection work should fully implement the Party and the state’s guidelines, policies, and decision-making arrangements, and serve the development of the national economy and society.

Article 3 　Units and individuals (including individual business operators) 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 and shall pay value-added tax in accordance with the provisions of this Law.
The sale of goods, services, intangible assets, and real estate refers to the paid transfer of ownership of goods and real estate, the paid provision of services, or the paid transfer of ownership or usage rights of intangible assets.

Article 4 　A taxable transaction occurring within the territory refers to the following circumstances:

(1) For the sale of goods, the place of dispatch or location of the goods must be within China;

(2) For the sale or lease of real estate or the transfer of rights to use natural resources, the location of the real estate and natural resources must be within the territory.

(3) For the sale of financial products, the financial products must be issued within China, or the seller must be a domestic entity or individual.

(4) Except as provided in subparagraphs (2) and (3) of this article, for the sale of services or intangible assets, the services or intangible assets must be consumed within China, or the seller must be a domestic entity or individual.

Article 5 　Any of the following circumstances shall be deemed to constitute 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 households use goods they have produced themselves or commissioned for processing to provide collective welfare or for personal consumption;

(2) Units and individual business households transferring goods gratuitously;

(3) Units and individuals transfer intangible assets, real estate, or financial products gratuitously.

Article 6 　Transactions falling under any of the following circumstances are not subject to tax and are exempt from value-added tax:

(1) Employees provide services to their employer or the entity that employs them in exchange for wages or salaries;

(2) Collecting administrative and public service fees and government funds;

(3) Obtaining compensation in accordance with legal provisions due to expropriation or requisition;

(4) Obtain interest income from deposits.

Article 7 　Value-added tax is an indirect tax; the sales amount of taxable transactions does not include the value-added tax amount. The value-added tax amount shall be separately indicated on the transaction voucher in accordance with the regulations of the State Council.

Article 8 　When a taxpayer engages in a taxable transaction, it shall calculate and pay the value-added tax by determining the tax payable through offsetting the output tax against the input tax, using the general tax calculation method, unless otherwise provided for under this Law.

Small-scale taxpayers may use a simplified tax calculation method to determine and pay value-added tax by calculating the tax payable based on their sales amount and the applicable tax rate.

The tax calculation methods for value-added tax on the joint exploitation of offshore oil and natural gas by Chinese and foreign entities shall be implemented in accordance with the relevant provisions of the State Council.

Article 9 　The term “small-scale taxpayer” as used in this Law refers to taxpayers whose annual taxable sales of value-added tax do not exceed five million yuan. Small-scale taxpayers with sound accounting systems and capable of providing accurate tax information may register with the competent tax authority and calculate and pay value-added tax in accordance with the general taxation method prescribed under this Law. Based on the needs of national economic and social development, the State Council may adjust the criteria for small-scale taxpayers and shall file such adjustments with the Standing Committee of the National People's Congress for record.

Chapter 2: Tax Rates

Article 10 Value-Added Tax Rate:

(1) For taxpayers selling goods, providing processing, repair, and maintenance services, leasing tangible movable property, or importing goods—except as provided in items (2), (4), and (5) of this article—the tax rate is 13 percent.

(2) For taxpayers selling transportation, postal, basic telecommunications, construction, and real estate leasing services; selling real estate; transferring land use rights; or selling or importing the following goods—except as provided in items (4) and (5) of this article—the tax rate shall be 9 percent.

1. Agricultural products, edible vegetable oils, and edible salt;

2. Tap water, heating, air conditioning, hot water, gas, liquefied petroleum gas, natural gas, dimethyl ether, biogas, and coal products for residential use;

3. Books, newspapers, magazines, audiovisual products, and electronic publications;

4. Feed, fertilizers, pesticides, agricultural machinery, and agricultural film.

(3) For taxpayers selling services and intangible assets, except as provided in items (1), (2), and (5) of this article, the tax rate is six percent.

(4) For taxpayers exporting goods, the tax rate is zero, unless otherwise specified by the State Council.

(5) For services and intangible assets sold across borders by domestic entities and individuals within the scope prescribed by the State Council, the tax rate is zero.

Article 11 　The tax rate for value-added tax paid using the simplified tax calculation method is 3 percent.

Article 12 　If a taxpayer engages in two or more taxable transactions subject to different tax rates and collection rates, it shall separately account for the sales amounts applicable to each different tax rate and collection rate. If separate accounting is not performed, the higher tax rate shall apply.

Article 13 　If a taxpayer engages in a taxable transaction involving two or more tax rates or collection rates, the applicable tax rate and collection rate shall be those corresponding to the primary business activity of the taxable transaction.

Chapter 3: Taxable Amount

Article 14 　For those calculating and paying VAT under the general tax calculation method, the amount of tax payable shall be the balance remaining after deducting the input tax for the current period from the output tax for the current period. For those calculating and paying VAT under the simplified tax calculation method, the amount of tax payable shall be the current-period sales amount multiplied by the applicable tax rate. For imported goods, VAT shall be calculated and paid by multiplying the composition-based taxable price stipulated in this Law by the applicable tax rate. The composition-based taxable price is the customs-based taxable price plus the customs duties and consumption taxes; if the State Council has made other provisions, such provisions shall prevail.

Article 15 　For taxable transactions occurring within China involving entities and individuals from outside China, the purchaser shall serve as the withholding agent, unless the purchaser has entrusted a domestic agent to file and pay the tax in accordance with the regulations of the State Council.

If the withholding agent withholds and remits taxes in accordance with the provisions of this Law, the amount of tax to be withheld and remitted shall be calculated by multiplying the sales amount by the applicable tax rate.

Article 16 　The output tax refers to the value-added tax amount calculated by multiplying the sales amount by the tax rate prescribed under this Law, which arises from taxable transactions conducted by the taxpayer. The input tax refers to the value-added tax amount paid or borne by the taxpayer when purchasing goods, services, intangible assets, or real estate. Taxpayers shall offset the input tax against the output tax by presenting value-added tax deduction certificates prescribed by laws, administrative regulations, or the State Council.

Article 17 　Sales revenue refers to the consideration received by a taxpayer from taxable transactions, including all consideration corresponding to economic benefits in both monetary and non-monetary forms. It does not include the output tax calculated under the general taxation method or the tax payable calculated under the simplified taxation method.

Article 18 　Sales amounts are calculated in RMB. If a taxpayer settles sales amounts in currencies other than RMB, they shall be converted into RMB for calculation.

Article 19 　In cases where a taxable transaction deemed as such under Article 5 of this Law occurs, or where the sales amount is in a non-monetary form, the taxpayer shall determine the sales amount based on the market price.

Article 20 　If sales figures are significantly lower or higher than normal without justifiable reasons, the tax authorities may determine the sales amount in accordance with the provisions of the "Tax Collection and Administration Law of the People's Republic of China" and relevant administrative regulations.

Article 21 If the amount of input tax for the current period exceeds the amount of output tax for the same period, the taxpayer may, in accordance with the regulations of the State Council, choose to carry forward the excess to the next period for continued deduction or apply for a refund.

Article 22 　The following input tax amounts paid by taxpayers may not be deducted from their output tax amounts:

(1) The input tax amount corresponding to projects taxed using the simplified tax calculation method;

(2) The input tax amount corresponding to projects exempt from value-added tax;

(3) The input tax amount corresponding to items with abnormal losses;

(4) The input tax amounts corresponding to goods, services, intangible assets, and real estate purchased for collective welfare or personal consumption;

(5) The input tax amounts corresponding to catering services, daily household services, and entertainment services that are purchased and directly used for consumption;

(6) Other input tax amounts prescribed by the State Council.

Chapter 4: Tax Incentives

Article 23 　Small-scale taxpayers engaged in taxable transactions are exempt from value-added tax if their sales revenue does not reach the threshold for taxation; if their sales revenue reaches the threshold, they shall calculate and pay the full amount of value-added tax in accordance with the provisions of this Law.

The threshold standards stipulated in the preceding paragraph shall be prescribed by the State Council and submitted to the Standing Committee of the National People's Congress for record.

Article 24 　The following items are exempt from value-added tax:

(1) Agricultural products produced by agricultural producers themselves, as well as agricultural machinery services—including plowing, irrigation, pest and disease control, plant protection, agro-pastoral insurance, and related technical training—plus breeding and disease prevention for poultry, livestock, and aquatic animals;

(2) Medical services provided by medical institutions;

(3) Used books—items sold by natural persons for their own personal use;

(4) Instruments and equipment imported for direct use in scientific research, scientific experiments, and teaching;

(5) Imported materials and equipment donated free of charge by foreign governments and international organizations;

(6) Goods directly imported by organizations of persons with disabilities for exclusive use by persons with disabilities, and services provided personally by persons with disabilities themselves;

(7) Childcare services provided by nurseries, kindergartens, elderly care institutions, and disability service agencies; marriage brokerage services; and funeral services.

(8) Academic education services provided by the school, and services provided by students through work-study programs;

(9) Ticket revenue from cultural events organized by memorial halls, museums, cultural centers, cultural heritage protection institutions, art galleries, exhibition halls, calligraphy and painting institutes, and libraries; as well as ticket revenue from cultural and religious activities held at religious sites.

The specific standards for the tax-exempt items stipulated in the preceding paragraph shall be prescribed by the State Council.

Article 25 　Based on the needs of national economic and social development, the State Council may formulate special value-added tax preferential policies to support the development of small and micro enterprises, bolster key industries, encourage innovation, entrepreneurship, and employment, and promote charitable donations, subject to filing with the Standing Committee of the National People's Congress.

The State Council should conduct timely evaluations and adjustments of the value-added tax preferential policies.

Article 26 　Taxpayers engaging in both general VAT-taxable activities and VAT preferential projects shall separately account for the sales revenue of the VAT preferential projects. Projects that are not separately accounted for shall not be eligible for tax incentives.

Article 27 　Taxpayers may waive the value-added tax (VAT) preferential treatment. Once they waive the preferential treatment, they will be ineligible to enjoy this tax benefit for a period of 36 months, except for small-scale taxpayers.

Chapter 5: Collection and Management

Article 28 　The time when the value-added tax liability arises shall be determined in accordance with the following provisions:

(1) For taxable transactions, the time when the tax obligation arises is the day on which the sales proceeds are received or the day on which the receipt of sales proceeds is evidenced by obtaining the relevant documentation. If an invoice is issued first, the time when the tax obligation arises shall be the day the invoice is issued.

(2) In the event of a deemed taxable transaction, the time when the tax obligation arises shall be the day on which the deemed taxable transaction is completed.

(3) For imported goods, the time when the tax obligation arises is the day on which the goods are declared for import.

The time when the obligation to withhold value-added tax arises is the same day on which the taxpayer's value-added tax liability arises.

Article 29 　The place of value-added tax payment shall be determined in accordance with the following provisions:

(1) Taxpayers with fixed production and business premises shall file their tax returns with the tax authority in charge of their institutional location or place of residence. If the head office and branch offices are located in different counties (or cities), each shall file its tax return separately with the tax authority in charge of its respective location. With approval from the financial and tax authorities at or above the provincial level, the head office may, on a consolidated basis, file its tax return with the tax authority in charge of the head office’s location.

(2) Taxpayers without a fixed place of business shall file their tax returns with the tax authority having jurisdiction over the location where their taxable transactions occur. If they fail to file and pay taxes, the tax authority having jurisdiction over their institutional location or place of residence shall make up for the tax collection.

(3) Natural persons who sell or lease real estate, transfer the use rights of natural resources, or provide construction services shall file tax returns with the tax authorities having jurisdiction over the location of the real estate, the location of the natural resources, and the place where the construction services are performed.

(4) Taxpayers of imported goods shall file their tax returns at the location designated by the customs.

(5) The withholding agent shall file and pay the withheld taxes to the tax authority having jurisdiction over the location of its institution or its place of residence. If the location of the institution or place of residence is overseas, the withholding agent shall file and pay the withheld taxes to the tax authority having jurisdiction over the place where the taxable transaction occurred.

Article 30 　The tax calculation periods for value-added tax are ten days, fifteen days, one month, or one quarter. The specific tax calculation period for each taxpayer shall be determined by the competent tax authority based on the amount of tax payable by the taxpayer. Taxpayers who do not frequently engage in taxable transactions may pay tax on a per-transaction basis. If a taxpayer uses a month or a quarter as its tax calculation period, it shall file and pay tax within fifteen days from the end of the period. If the tax calculation period is ten days or fifteen days, the taxpayer shall file and pay tax within fifteen days starting from the first day of the following month. The tax calculation periods and filing and payment deadlines for withholding agents shall be governed by the provisions of the preceding two paragraphs. When taxpayers import goods, they shall file and pay taxes within the time limits prescribed by the customs authorities.

Article 31 　If a taxpayer uses a tax period of 10 or 15 days, it shall remit the estimated tax payment within five days from the expiration of the period. If any other provisions are stipulated by laws or administrative regulations regarding the advance payment of taxes by taxpayers, such provisions shall prevail.

Article 32 　Value-added tax is collected by the tax authorities, and for imported goods, the value-added tax is collected on behalf of the tax authorities by the customs. The customs shall provide the tax authorities with information on the value-added tax collected on behalf of the authorities as well as details regarding the export customs declaration of the goods. The methods for calculating the value-added tax on items carried or mailed into the country by individuals shall be formulated by the State Council and submitted to the Standing Committee of the National People's Congress for record.

Article 33 　Taxpayers who export goods or provide cross-border sales of services and intangible assets eligible for a zero tax rate shall file a declaration with the competent tax authority to apply for a refund (or exemption) of tax. The specific procedures for exporting tax refunds (or exemptions) shall be formulated by the State Council.

Article 34 　Taxpayers shall issue and use value-added tax (VAT) invoices in accordance with the law. VAT invoices include both paper invoices and electronic invoices. Electronic invoices have the same legal effect as paper invoices.
The country is actively promoting the use of electronic invoices.

Article 35 　The tax authorities have established a mechanism for sharing VAT-related tax information and a coordination mechanism with departments including the Ministry of Industry and Information Technology, public security authorities, customs, market supervision and administration authorities, the People's Bank of China, and financial regulatory authorities. Relevant departments shall, in accordance with laws and administrative regulations and within their respective areas of responsibility, support and assist the tax authorities in carrying out VAT collection and management.

Article 36 　The collection and administration of the value-added tax shall be carried out in accordance with the provisions of this Law and the Tax Collection and Administration Law of the People's Republic of China.

Article 37 　Taxpayers, withholding agents, tax authorities, and their staff members who violate the provisions of this Law shall be held legally liable in accordance with the "Law of the People's Republic of China on Tax Collection and Administration" and relevant laws and administrative regulations.

Chapter VI Supplementary Provisions

Article 38 　This Law shall take effect as of January 1, 2026. The Provisional Regulations of the People’s Republic of China on Value-Added Tax shall be repealed concurrently.