VAT in China guide

Chinese VAT for digital service providers

The imported commodities retailed through the cross-border e-commerce shall, according to the types of goods, be subject to import VAT. Individuals purchasing any imported goods retailed through cross-border e-commerce shall be taxpayers; the actual transaction prices shall be a dutiable price; and e-commerce corporations, corporations specialized in e-commercial transaction platform or logistic enterprises can be the withholding agent for VAT.

VAT rates

Sales of goods and the provision of processing, repair or replacement services are generally subject to 16% VAT. Certain goods are subject to a reduced rate at 10%. VAT pilot services are subject to the following rates: 5%, 6%, 10% or 16%, depending on the nature of the services. The 3% rate applies to supplies covered by the simplified VAT calculation methods or supplies made by small-scale VAT taxpayers (small businesses).

Late – registration penalties

The VAT regulations in China do not contain any penalty provision for late VAT registration. But there are penalties for small-scale VAT taxpayers who do not register as general VAT taxpayers in time when their annual taxable sales amount exceeds the threshold.