CHINA Trends and Developments Contributed by: Ying Ding, Shihui Partners
Legislative Landscape During the 14th Five-Year Plan period (2021–2025), China made substantial progress in strengthening the rule of law, fairness and efficiency in taxation. Laws The Value-Added Tax Law (VAT Law) was enacted on 25 December 2024 and came into force on 1 January 2026. For decades, VAT – which generates the high - est tax revenue among the 18 taxes currently levied in China – was governed by provisional regulations and departmental rules. The VAT Law therefore marks a new era for China’s VAT system. Since the beginning of the 2026 tax year, the State Taxation Administration (STA) has rapidly issued new regulations and guidance to ensure the smooth imple - mentation of the VAT Law. To date, of the 18 taxes levied in China, 14 tax laws are in force, listed below in chronological order of enact - ment (effective dates may differ): • Tobacco Leaf Tax Law; • Vessel Tonnage Tax Law; • Vehicle Purchase Tax Law; • Cultivated Land Occupation Tax Law; • Resource Tax Law; • Urban Maintenance and Construction Tax Law; • Deed Tax Law; • Stamp Duty Law; • Tariff Law; and • Value-Added Tax Law. The remaining four taxes yet to be legislated include the excise tax, land appreciation tax, real estate tax, and urban and town land use tax. Notably, in March 2025, the STA and the Ministry of Finance jointly published a long-awaited consultation on revision of the Tax Collection and Administration Law (TCAL). The current TCAL was last comprehen - sively revised in 2001, with minor amendments in 2013 and 2015. The revised TCAL, once enacted, will • Individual Income Tax Law; • Corporate Income Tax Law; • Vehicle and Vessel Tax Law; • Environmental Protection Tax Law;
strengthen tax administration across key areas includ - ing information collection, reporting by platform oper - ators, law enforcement, and tax controversy. Regulations Consistent with the policy objectives of building a uni - fied national market and a unified social credit system, the STA has introduced numerous new regulations and practical guidelines in recent years. These instruments introduced new and amended rules concerning: • tax credit ratings for taxpayers and fee payers; • taxation and administration of enterprises undergo - ing bankruptcy; and • tax services to facilitate business establishment, dissolution and re-domiciliation (within China). Administrative Measures To improve the efficiency of tax administration, China has continued upgrading the Golden Tax System and tax big-data management. The tax authorities have applied tax big-data (tax-related information gathered from a wide range of sources) in analysing economic growth, detecting tax non-compliance, and support - In December 2024, following several years of trials in selected provinces, China implemented the use of fully digitalised electronic invoices ( 全面数字化电子发 票 ) nationwide. These electronic invoices are stored in digital form, and automatically transmit specified information to the tax authorities. Tax-related information reporting by platform operators Following a public consultation in December 2024, the State Council issued the Provisions on Internet Plat - form Enterprises’ Reporting of Tax-Related Informa - tion (State Council Decree No 810) on 20 June 2025. The STA subsequently issued several implementing guidelines, including the Announcement of the State Taxation Administration on Matters Concerning Inter - net Platform Enterprises’ Reporting of Tax-Related Information (STA Announcement No 15 of 2025). ing other administrative functions. Fully digitalised electronic invoices
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