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China VAT Exemptions and Zero-Rated Services

China's VAT system includes various exemptions and zero-rated services, where zero-rated means no VAT is charged but input VAT credits can be claimed, while VAT exempt means no VAT is charged and credits cannot be claimed. Key exemptions cover public welfare services, certain transactions, and specific cross-border services, while zero-rated services primarily involve exports and certain cross-border services consumed overseas. Businesses must understand these distinctions to effectively manage VAT compliance and eligibility for credits.

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31 views2 pages

China VAT Exemptions and Zero-Rated Services

China's VAT system includes various exemptions and zero-rated services, where zero-rated means no VAT is charged but input VAT credits can be claimed, while VAT exempt means no VAT is charged and credits cannot be claimed. Key exemptions cover public welfare services, certain transactions, and specific cross-border services, while zero-rated services primarily involve exports and certain cross-border services consumed overseas. Businesses must understand these distinctions to effectively manage VAT compliance and eligibility for credits.

Uploaded by

ai.vedang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

AI Mode All Images Videos News Other

July 28, 2025

china vat exempted/zero rated services 16 sites

China | VAT/GST Rates & Thresho

China VAT exemptions and zero-rated services [6] VAT exemption incentives are a
specific services and goods includi

Baker McKenzie Resource Hub


China has a complex system of Value-Added Tax (VAT) with various exemptions and zero-
rated services. Understanding the difference between these two is crucial: zero-rated
Value Added Tax in China | Doing
means no VAT is charged, but businesses can claim input VAT credits, while VAT exempt Business in China
means no VAT is charged and input VAT cannot be claimed. Telecommunication services;
Intellectual property services; Logis
Here's a breakdown of China's VAT exemptions and zero-rated services:
China Briefing

VAT exemptions What is the difference between zer


exempting a good in the ...

Public welfare and essential services: For a “zero-rated good,” the govern
its sale but allows credits for the va
Sales of self-produced agricultural products by producers. Tax Policy Center

Childcare, elderly care, and medical services provided by qualified institutions.


Show all

Educational services by qualified institutions.

Agricultural services.

Specific scientific equipment and items for public welfare.

Services for marriage, funeral, and cultural or religious activities.

Specific transactions and thresholds:

Sales of secondhand goods by individuals.

Small-scale taxpayers with monthly revenue less than CNY 100,000 (valid from
January 1, 2023, to December 31, 2027).

Certain cross-border services (when consumed entirely overseas):

Authentication and consultation services.

Professional and technical services.

Business support services.

Telecommunication, broadcasting, and advertising services.

International transportation and logistics auxiliary services (excluding warehousing and


collection/delivery).

Warehousing services and leasing of tangible movable property used overseas.

Financial and insurance services.

Cultural, sports, education, medical and travel services provided outside China.

Zero-rated services

Exports:

Exported goods.

International transportation services (with proper qualifications).


Ask anything

Space transportation services.


Cross-border services (provided to overseas entities and fully consumed overseas):

AI Mode All and


Research Images Videos (R&D)
development Newsservices.
Other

Design services (excluding those related to domestic immovable property).

Software services.

Information system services.

Business process management (BPM) services.

Offshore outsourcing services (including ITO, BPO, KPO).

Energy management contracting services.

Radio and television program production and distribution services.

Circuit design and testing services.

Technology transfer.

Note: The distinction between zero-rated and exempt services is critical for businesses as it
affects their ability to claim input VAT credits or refunds. Taxpayers should carefully assess
their eligibility for these treatments and consult with tax professionals to ensure compliance
with Chinese tax regulations.

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