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VAT Rates in China

Updated Chinese VAT rate tables

Welcome to our comprehensive page on the Value Added Tax (VAT) rates applicable in China. As one of the world’s largest economies, China employs a multifaceted VAT system that is integral to its fiscal policy. The Chinese VAT system categorizes goods and services into different brackets, each subject to specific tax rates.

These rates are designed to accommodate the varied nature of transactions within the country, ranging from essential goods to luxury items and industrial products. Standard VAT rates in China typically vary between 13% and 16%, although certain goods and services may qualify for reduced rates or exemptions.

This page provides a detailed table of the current VAT rates across various categories, ensuring you have the accurate and up-to-date information needed for compliance and planning. Whether you are a business operating in China or engaging in trade with Chinese companies, understanding these VAT obligations is crucial.

 

vat rates in china - chinese vat rates

VAT Rates in China

Standard VAT rate
The standard VAT rate is the primary rate of VAT applied to goods and services within a country, covering most items except for certain specific goods and services that may qualify for a reduced rate. Some exceptions include essential items or goods and services that meet certain criteria outlined below. China applies 3 standard VAT rates.
Rate Good or Services
13%
  • Rental agreements for tangible movable assets, excluding financial sale and leaseback agreements.
  • The transaction and import of goods, along with offering processing services, and services for repair and replacement, unless noted otherwise.
9%
  • Sales of immovable property and land use rights;
  • Leases for immovable property, including financial and operating leases;
  • Agricultural products, including edible salt, agricultural machinery, animal feed, pesticides, agricultural film, and chemical fertilizers;
  • Transportation services and postal services;
  • Basic telecommunications services;
  • Construction services;
  • Energy resources, such as gas including liquefied petroleum gas, natural gas, biogas, and dimethyl ether, along with edible vegetable oil;
  • Climate control services, including air conditioning, hot water, and heating;
  • Media and publications, including books, newspapers, magazines, audio and video products like audio tapes, video tapes, and CDs, and electronic publications
6%
  • Sales of intangible assets, including the transfer of trademarks and copyrights, excluding transfers of land use rights;
  • Financial services;
  • Value-added telecommunications services;
  • Various modern services, such as research and development, technical services, information technology services, radio and television, and business support services;
  • Lifestyle services.
Reduced VAT rates
China has reduced rates of 5%, 3%, 2%, 1.5%, 1% and 0.5%.
Below are some goods and services that may be eligible for a reduced value-added tax (VAT) rate, and are subject to potential modifications:
Rate Good or Services
5%
Sales of real estate held for under two years by individuals
3%
This applies to transactions conducted by small-scale taxpayers and general taxpayers who choose to use the simplified tax calculation method. These can be:

  • Public transport services, including ferry, bus passenger, subway, urban light rail, taxi, long-distance passenger transportation, and shuttle bus;
  • Educational and Nonbusiness Enterprises;
  • Construction Services;
  • Research and development, information technology services, and forensic consulting services;
  • Sales of technology and transfers of copyright;
  • Services related to the animation industry, such as script services, design, filming, and editing;
  • Movie screening, warehousing, loading and unloading, collection and delivery, and cultural and sports services.
2%
A lower simplified rate of 2% is applicable to specific sales of used fixed assets by general taxpayers when the input VAT cannot be credited.

This rate applies under the following conditions, where VAT is noncreditable:

  • The taxpayer sells fixed assets for which input VAT has not been and cannot be deducted, after conducting taxable activities that are subject to simplified VAT;
  • The taxpayer initially purchased or created the fixed assets as a small-scale taxpayer and sells them after transitioning to a general taxpayer.
1.5%
A reduced rate of 1.5% applies to residential property leases provided by small-scale taxpayers.
0.5% From May 1, 2020, through December 31, 2027, used car dealerships are subject to a simplified VAT rate of 0.5% on the supply of used cars.
Exempt From VAT
  • Sales of goods previously used by the sellers, such as secondhand goods;
  • Self-produced agricultural products sold directly by agricultural producers, as defined in Article 15 of the Interim Regulation, although most agricultural products are VAT-exempt even for resellers;
  • Contraceptive medicines and devices;
  • Antique books.
  • Childcare and educational services offered by childcare centers and kindergartens;
  • Nursing care services from nursing homes, along with centralized living and care services from pensionary institutions;
  • Nursing care provided by organizations for the welfare of disabled persons;
  • Matchmaking and funeral services;
  • Services rendered to the public by disabled individuals;
  • Medical services from medical institutions;
  • Educational services by schools offering academic programs, including revenues from Sino-foreign collaborative educational programs under SAT Announcement [2018] No. 42;
  • Services for work-study students;
  • Agricultural services such as automation, irrigation, pest control, plant protection, insurance related to agriculture and animal husbandry, technical training, and breeding and disease prevention for poultry, livestock, and aquatic animals;
  • Revenues from entrance tickets at memorials, museums, cultural centers, cultural relics management agencies, art galleries, exhibition halls, and painting and calligraphy institutes, and libraries offering cultural and sports services;
  • Ticket revenues from cultural and religious events held by temples, shrines, mosques, and churches;
  • Government funds and administrative fees collected by non-administrative entities as specified in Article 10 of the Implementation Measures for the Pilot Scheme;
  • Individual transfers of copyright;
  • Sales of self-built homes for personal use by individuals;
  • Transportation revenues from Taiwan-based shipping companies and airlines operating direct sea voyages and flights across the Taiwan Straits;
  • International freight forwarding agency services provided either directly or indirectly by taxpayers.
Zero rated
  • International Supplies:
    • Cross-border sales of services, intangible assets, or immovables by entities;
    • Research and development services;
    • Software services;
    • Circuit design and testing services;
    • Information system services;
    • Business process management services;
    • Offshore outsourcing;
    • Transfers of technology;
    • Contract energy management services;
    • Design services, including industrial, style, costume, environmental, and graphic design (further described below);
    • Radio, film, and television production and distribution services.
  • International Transportation:
    • Space Transportation.

 

If you wish to get quickly informed about all basic and reduced VAT rates in Europe or VAT rates in the World you can view our dedicated page by clicking on the respective title.

 

 

Last Updated: 02/05/2024

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

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