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VAT in China

Updated on Monday 11th June 2018

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VAT-in-China.jpgThe standard Value Added Tax in China is set at 16% starting with May 2018 and it is imposed on a series of products and services offered on the market. There are also other types of VAT rates imposed on particular types of services and goods, but for information about what taxes you need to consider when opening a company in China, we suggest you talk to one of our company formation specialists in China. Our advisors can help foreign investors open companies in this country by guiding them throughout the entire procedure.

What is the VAT rate in China?

The standard VAT rate in China is set at 16% and it is applied to the sales of products and services in this country, and also on the import of goods. Additionally, a low VAT rate of 13% is applicable for the important food categories (agriculture products, dairy, cereals, meat, fruits vegetables), for newspapers and magazines, water supply, heating. It is good to know that a VAT rate of 10% is imposed on accommodations, real estate, restaurants, communication, logistics, and transportation in China.

What are other VAT rates imposed in China?

The VAT system in China has been revised in May 2018, and the State Administration of Taxation wanted to simplify the legislation in this sense. The following table contains other goods and services for which the VAT needs to be paid:
Financial services, insurance 6%
City maintenance 6%
Chinese National Education 3%
Construction Services 3%
Local education 2%
For a proper understanding of the VAT rates imposed in China at the time of company incorporation in China, we recommend you address your inquiries to our Chinese company formation agents.

Taxpayers in China

Companies with activities in China are considered taxpayers, and according to the tax structure in this state, there are two main categories of businesses which must apply for the general taxpayer status, such as:
  • general taxpayers with incomes ranging between USD 500,000 and 5 million;
  • small-scale taxpayers with incomes below USD 500,000. 
It is good to know that there are also VAT exemptions for the export of goods, meaning that companies with operations in this area will not pay such tax.
If you need additional information about the VAT in China and about how can you register a company in this country, we kindly invite you to contact our team of company incorporation representatives in China.


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