Tax rate by region China

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

China operates a multi-tiered Value Added Tax (VAT) framework featuring a 13% standard rate, with its cross-border rules freshly updated under the new VAT Law Implementation Rules that shifted the sourcing model strictly to the “place of consumption.” Non-resident digital and service providers cannot register for VAT directly, shifting the burden entirely onto the Chinese resident customer or local agent to withhold and account for the tax via a reverse charge mechanism. Additionally, compliance has expanded significantly under State Council Decree No. 810, which mandates that both domestic and overseas internet platform enterprises must regularly report identity and transaction data for local operators.

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China

China applies a Value Added Tax (VAT) with multiple rates: 13% (standard on goods sales/importation), 9% (necessities, certain services), 6% (telecommunications, financial services, consumer services), and 0% (exports). 

Official government link: State Taxation Aministration - English Version

13.00%

E-products and services VAT/Sales tax rate

6.00%

Reduced tax rate

Reduced tax rate product categories

Telecommunications, financial services, consumer services

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes (Chinese resident customer or local representative accounts for VAT on imports of services)

Tax ID validation required

Yes

When do you have to register

Non-residents cannot register directly; the Chinese resident customer or local agent is responsible for accounting and reporting VAT

Local representative needed

Yes (a local representative or the customer is responsible for accounting and reporting the tax — vatcalc)

Registration procedure

Non-residents cannot register; obligation falls on Chinese resident customer or local agent

List of digital and electronic services liable for tax

Digital and electronic services imported by Chinese customers

Penalties

Late filing/payment penalties per Chinese Tax Collection and Administration Law: 

  • fines of CNY 2,000-50,000 for failure to file;
  • daily late payment surcharge of 0.05% (~18% annual) on overdue tax. 

Filing interval

Chinese customer/agent files per their normal VAT filing schedule (typically monthly)

Filing deadline

Per the Chinese customer’s normal VAT return deadline

E-invoicing requirements

Fapiao system mandatory in China for domestic businesses; non-residents not directly issuing

Record keeping

10 years

How-To Guides: China SaaS VAT

Step: 1 Threshold

There is no de-minimis VAT registration threshold for foreign SaaS providers; VAT registration for non-resident businesses is generally not permitted — instead VAT is handled through a withholding mechanism by the Chinese purchaser when services are consumed in China. Local entities must register if they have a Chinese business presence.

Step: 2 Business Registration

Foreign providers selling digital services into China typically do not register directly with China VAT; the Chinese customer or withholding agent deals with VAT obligations. Domestic entities register with the State Taxation Administration (STA) / National Tax Authority (国家税务总局) through the local tax bureau.

Step: 3 TIN/VAT Number

Domestic entities receive a VAT Tax Identification Number (TIN) issued by the State Taxation Administration upon VAT registration. Non-residents do not receive a VAT number but may be represented by a domestic agent where mandated.

Step: 1 Standard Rate

The sales tax rate is 6%–13% depending on service classification; modern and digital services typically attract the 6% rate (subject to specification).

Step: 2 Rate Formula

To calculate your tax amounts, please use the following formula:

 

Tax Amount = Net Price X VAT rate 

Step: 3 Reverse Charge (B2B)

There is no traditional EU-style reverse charge for non-resident SaaS; instead, the Chinese purchaser withholds VAT on cross-border services consumed in China (serves like a reverse charge withholding).

Step: 1 Selling B2C

If digital services are consumed in China by private consumers, VAT may still be deemed consumed in China and trigger VAT withholding by the purchaser or platform intermediary; non-resident suppliers cannot register directly and typically price include VAT.

Step: 2 Selling B2B

Where a Chinese business customer buys SaaS consumed in China, the customer/withholding agent is responsible for withholding and remitting VAT; the supplier is not required to charge VAT.

Step: 3 Invoice Requirements

Invoices must include:

 

– Supplier Name and Address (non-resident or domestic)
– Buyer Name and Chinese VAT TIN (if domestic)
– Service Description and Consumption Location
– Date and Sequential Invoice Number
– Currency and Amount
– VAT Rate and VAT Amount (shown if applicable)

Step: 1 Filing Interval

Domestic VAT taxpayers file returns monthly (general) or quarterly (small-scale). Withholding agents follow the same periods for remitting withheld VAT.

Step: 2 Filing Deadline

Filing deadline is typically 15 days after period end (monthly/quarterly), adjusted for official deadlines.

Step: 3 Submission

VAT returns and payments are submitted via the STA e-tax portal (电子税务局) and payments often by bank transfer. Withheld VAT by the purchaser is declared in their return.

Step: 4 Record Keeping

Accounting records, invoices and VAT documents must be retained for at least 10 years under Chinese VAT compliance rules.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Yukon’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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