Explore our services, insights and latest news.
China’s State Administration of Taxation recently issued the Announcement [2021] No.4 with the aim of streamlining procedures for claiming VAT incentives with the new policy effective from April 1st, 2021.
The Announcement facilitates taxpayers who claim VAT reductions and exemptions, since a direct claim in the routine VAT filing form is now sufficient (e.g., a separate application is no longer required). Supporting materials should be well kept and be ready for inspection when necessary.
For taxpayers who claim the preferential VAT policy of refund upon collection for the first time, application materials and supporting materials shall be submitted to the tax authority.
For any subsequent claims for the preferential VAT policy of refund upon collection, if transaction situations remain unchanged, supporting materials are no longer required, with the exception of the application forms. If transaction situations have changed, a written explanation should be submitted to the tax authority upon the next filing.
Taxpayers who no longer meet the criteria for VAT incentives shall cease enjoying them from the exact month when they fail to meet the criteria.
The most relevant aspect of this new policy is that taxpayers are no longer required to prove their case before enjoying VAT incentives. The Announcement therefore reduces the workload of taxpayers. However, there is no change to the existing criteria of enjoying VAT incentives.
In short, taxpayers are now tasked with the obligation to self-review and assess their own qualifications and will be held responsible for any errors. As such, the documentation record for the application has become more crucial than ever. Therefore, a review of the tax function of enterprises should be made, in order to ensure the assessment and documentation of VAT incentives are well performed.
If you would like to know more about the most recent tax and financial developments in China, or you require our assistance on this matter, please contact us at info@phcadvisory.com.
Recent court rulings in China have established that artificial intelligence replacement is not a legitimate reason to terminate employees, thus imposing a critical balance between technological advancement and labor rights protection. The legal principle emerging from such cases sends a clear signal to both domestic and foreign enterprises: automation cannot become a shortcut to bypass
China's economy delivered a robust start to 2026, with gross domestic product expanding 5.0% year-on-year in the first quarter to 33.42 trillion CNY (approximately US$4.9 trillion), according to data released by the National Bureau of Statistics (NBS) on April 16. The growth excedeed market expectations of 4.8% and accelerated from 4.5% in the previous quarter.
China's economy in 2025 achieved its official growth target of around 5%, but the underlying trajectory showed clear deceleration and structural imbalance. Quarterly GDP growth slowed from 5.4% year-on-year in Q1 to 4.5% in Q4, reflecting weakening domestic demand even as external and industrial sectors remained relatively resilient. Across the year, a consistent pattern emerged:
