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Q：
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When will the new Value-Added Tax Law come into effect?
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The Value-Added Tax Law of the People's Republic of China was adopted on December 25, 2024 and will come into effect on January 1, 2026.
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Which taxpayers need to pay value-added tax?
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Units and individuals (including individual industrial and commercial households) that sell goods, services, intangible assets, real estate (hereinafter referred to as taxable transactions) within the territory of the People's Republic of China (hereinafter referred to as within the territory), as well as 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 the ownership of goods and real estate, the paid provision of services, and the paid transfer of the ownership or right of use of intangible assets.
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Under what circumstances does a taxable transaction occur within the territory?
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Where goods are sold, the place of origin or location of the goods is within the territory;
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Where immovable property is sold or leased or the right to use natural resources is transferred, the location of the immovable property or natural resources shall be within the territory of China.
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For the sale of financial products, the financial products are issued within the territory of China, or the seller is a domestic entity or individual;
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Except as provided for in items 2 and 3 of this article, for the sale of services or intangible assets, the services or intangible assets shall be consumed within the territory of China, or the seller shall be a domestic entity or individual.
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Under what circumstances shall it be regarded as a taxable transaction and value-added tax shall be paid in accordance with the provisions of this Law?
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Units and individual business households use self-produced or consigned processed goods for collective welfare or personal consumption;
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The free transfer of goods by units and individual industrial and commercial households;
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The free transfer of intangible assets, real estate or financial products by units and individuals.
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Under what circumstances does it not fall under taxable transactions and is value-added tax not levied?
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Employees provide services for the employing units or employers to obtain wages and salaries;
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Collect administrative and public service charges and government funds;
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Compensation obtained through expropriation or requisition in accordance with the law;
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Obtain interest income from deposits.
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