China VAT Guide for 2026: Rates, Registration & Compliance
China's standard VAT rate is 13%, with reduced 9% and 6% bands by sector. Covers general vs. small-scale taxpayer status, fapiao invoicing, and filing obligations for businesses operating in China.
Last updated
Key Takeaways
China's VAT applies at three general-taxpayer rates — 13% on most goods, 9% on transport and real estate, and 6% on modern and financial services, which includes software and SaaS — with a reduced 3% collection rate for small-scale taxpayers. A business with annual taxable sales above RMB 5 million registers as a general VAT taxpayer; China has no dedicated foreign-vendor digital-services registration regime distinct from ordinary VAT rules. Exports are zero-rated; SaaS and digital services are treated as modern services, taxable at 6% for a general taxpayer (3% for small-scale suppliers).
Taxability Snapshot
SaaS
Taxable
Digital Goods
Taxable
Sales Tax Rates
China's Value-Added Tax (VAT) applies at three general-taxpayer rates — 13% on most goods, 9% on transport, construction, and real estate, and 6% on modern and financial services, which includes software and SaaS. Small-scale taxpayers use a 3% collection rate. Exports are zero-rated. The State Taxation Administration (STA) administers it, and China's first unified VAT Law took effect 1 January 2026 [1][2].
Rate | Applies to |
|---|---|
13% | Most goods and manufacturing |
9% | Transport, construction, real estate, utilities |
6% | Modern and financial services, including SaaS |
3% | Small-scale taxpayers (simplified) |
For more detail, see our APAC VAT guides.
Registration & nexus threshold
China uses VAT taxpayer classification, not US-style economic nexus. A business with annual taxable sales above RMB 5 million must register as a general VAT taxpayer and charge 13%, 9%, or 6% depending on the supply, crediting input VAT, while those below the line are small-scale taxpayers taxed at a reduced levy rate [3]. China has no foreign-vendor VAT registration regime for digital services. Where an overseas supplier without an establishment in China sells services to a Chinese customer, the Chinese purchaser acts as withholding agent and remits the VAT [3]. Registration steps are in the How to Register section.
Filing frequency & deadlines
General taxpayers file monthly, due by the 15th of the following month, with some filing quarterly; small-scale taxpayers generally file quarterly. VAT on cross-border services is remitted by the domestic withholding agent on its own cycle at the time of payment, so a foreign supplier usually files nothing directly [1][2].
Exemptions
Exports of goods and qualifying cross-border services are zero-rated, and the VAT Law lists limited non-taxable and exempt items. SaaS and digital services are taxable, treated as modern services at 6% for a general taxpayer (3% for a small-scale supplier) [1][2].
Penalties
Overdue VAT carries a surcharge of 0.05% of the unpaid tax per day, about 18% a year. Underpaid or evaded tax can be fined between 0.5 and 5 times the amount owed, and false or missing fapiao (VAT invoices) carry separate, often severe, penalties [1].
Sources
[1] State Taxation Administration — Transactions subject to the 13% VAT rate
[2] State Taxation Administration — Transactions subject to the 9% VAT rate
[3] State Taxation Administration — China's tax system (VAT structure and administration)
[4] State Taxation Administration — China adopts the Value-Added Tax Law (effective 1 January 2026)
Verified July 2026 against State Taxation Administration guidance.
Frequently asked questions
Ready to automate your sales tax?
No credit card required.