Understanding VAT Small-Scale And General Taxpayers In China

Over the past few years, the national tax bureau has implemented a series of value-added tax (VAT) policies and regulatory improvements to streamline VAT processing in China and better align China's VAT system with international principles. The continued reduction of VAT rates demonstrates China's commitment to lightening the overall tax burden and foster a more tax-friendly business environment. China's VAT system is still evolving at a rapid speed; it is expected to be subject to further changes to improve transparency, compliance, and ease of doing business.

This article provides an overview of VAT tax rates and explains the two types of VAT taxpayers in China while aiming to help foreign companies choose the right type for their business.