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China Approves Draft Regulations for New VAT Law

12/21/2025

Summary

Story summary

The State Council of China has approved draft regulations for the new value-added tax (VAT) law, which is set to take effect on January 1, 2026.
The regulations, released for public consultation in August, provide detailed enforcement rules for the VAT law, which aims to enhance the country's largest tax revenue source.
The approval signals progress toward finalizing the regulations.
The VAT law, passed last year, aligns China's tax code with international standards.
The draft clarifies what constitutes "consumption within China," including certain overseas transactions related to goods and resources in the country.

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Story summary

The State Council of China has approved draft regulations for the new value-added tax (VAT) law, which is set to take effect on January 1, 2026.
The regulations, released for public consultation in August, provide detailed enforcement rules for the VAT law, which aims to enhance the country's largest tax revenue source.
The approval signals progress toward finalizing the regulations.
The VAT law, passed last year, aligns China's tax code with international standards.
The draft clarifies what constitutes "consumption within China," including certain overseas transactions related to goods and resources in the country.