State Council Publishes Regulations on the Implementation of the Value-Added Tax Law

On December 25, 2025, the State Council promulgated the Regulations of the People’s Republic of China on the Implementation of the Value-Added Tax Law (the “Regulations”).

The Regulations will take effect on January 1, 2026, and refine definitions and scope of application under the Value-Added Tax Law, clarifying the specific delineation of Goods, Services, Intangible Assets, and Immovable Property. They provide for the registration system for General Taxpayers and the criteria for recognizing Small-Scale Taxpayers, and set out in detail the issuance of Special VAT Invoices, Input Tax Deduction, and the handling of Sales Discounts and Returns. The Regulations clarify rules on Input Tax Deduction for Long-Term Assets, setting a demarcation line at an original value of RMB 5 million yuan. In the section on tax preferences, they define the scope of exemptions applicable to Agricultural Producers, Medical Institutions, Childcare Institutions, Elderly Care Institutions, Services Institutions for Persons with Disabilities, Schools, and others. In terms of collection and administration, they standardize taxpayer registration, invoice issuance, the time when tax obligation arises, export tax refund (exemption) declarations, and restrictions on waiving tax refunds. The Regulations also clarify the Information Access Rights of Tax Authorities and Anti-Tax-Avoidance adjustment measures.