The China VAT Calculator helps you quickly determine the value-added tax on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
China VAT Calculator
Calculate Value Added Tax (增值税) for China transactions with accurate rates
Standard Rate
Reduced Rate
Lower Rate
Zero Rate
Total Amount
VAT Amount
Net Amount
VAT Rate
Removing VAT: Net = Amount ÷ (1 + VAT Rate)
The China VAT Calculator helps you quickly determine the value-added tax on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
When adding VAT:
- VAT Amount = Net Amount × VAT Rate
- Total Amount = Net Amount + VAT Amount
When removing VAT:
- Net Amount = Total Amount ÷ (1 + VAT Rate)
- VAT Amount = Total Amount – Net Amount
China has four main VAT rates: Standard (13%), Reduced (9%), Lower (6%), and Zero (0%). Most goods are taxed at the standard rate, while different services and goods qualify for other rates.
Adding VAT Example
Let’s say you want to calculate VAT on a ¥1,000 product with the standard VAT rate of 13%:
Net Amount = ¥1,000
VAT Rate = 13% or 0.13
Calculate the VAT amount:
VAT Amount = ¥1,000 × 0.13 = ¥130
Calculate the total amount:
Total Amount = ¥1,000 + ¥130 = ¥1,130
Removing VAT Example
Now, let’s say you have a total amount of ¥1,130 and want to calculate the net amount and VAT:
Total Amount = ¥1,130
VAT Rate = 13% or 0.13
Calculate the net amount:
Net Amount = ¥1,130 ÷ (1 + 0.13) = ¥1,130 ÷ 1.13 = ¥1,000
Calculate the VAT amount:
VAT Amount = ¥1,130 – ¥1,000 = ¥130
Reduced Rate Example
For transportation services, the reduced VAT rate of 9% applies. Let’s calculate VAT on a ¥500 transportation service:
Net Amount = ¥500
VAT Rate = 9% or 0.09
Calculate the VAT amount:
VAT Amount = ¥500 × 0.09 = ¥45
Calculate the total amount:
Total Amount = ¥500 + ¥45 = ¥545
China VAT Rates Explained
China has four main VAT rates that apply to different types of goods and services:
Standard Rate: 13%
Reduced Rate: 9%
Lower Rate: 6%
Zero Rate: 0%
What Each Rate Applies To
Standard Rate (13%): Most goods including:
- Manufactured goods
- Processed agricultural products
- Gas, electricity, and water
- Real estate sales (for developers)
- Leasing of movable property
- Financial services (for certain transactions)
Reduced Rate (9%): Specific goods and services including:
- Transportation services
- Postal services
- Basic telecommunications services
- Construction services
- Real estate leasing
- Agricultural products (unprocessed)
- Food, vegetable oils, and edible oils
Lower Rate (6%): Services including:
- Financial services
- Modern services (R&D, technology, etc.)
- Life services (healthcare, education, etc.)
- Cultural and sports services
- Hotel and catering services
- Consulting services
Zero Rate (0%): International transactions including:
- Exported goods
- International transportation services
- Services provided to overseas entities
- Offshore services
VAT Exemptions in China
Some goods and services are exempt from VAT in China. These include:
- Agricultural products sold by farmers
- Contraceptive drugs and devices
- Antique books and artworks
- Scientific and educational instruments imported for direct use in scientific research and education
- Materials imported by foreign governments and international organizations for assistance programs
- Services provided to disabled persons
- Housing sales of ordinary residential buildings by individuals
- Technology transfer, development, and related services
Additionally, small-scale taxpayers with annual sales below certain thresholds may be exempt from VAT or subject to simplified tax calculation methods.
VAT Registration Thresholds
In China, businesses must register for VAT based on their annual sales:
- General Taxpayer: Annual sales exceeding ¥5,000,000
- Small-scale Taxpayer: Annual sales below ¥5,000,000
General taxpayers can issue VAT special invoices and claim input tax credits. They must file monthly VAT returns.
Small-scale taxpayers use simplified calculation methods and typically cannot issue VAT special invoices or claim input tax credits. They may file quarterly returns.
China has implemented VAT reforms over the years, including the replacement of Business Tax with VAT (营改增) for services, which was completed in 2016. This unified the tax system and eliminated double taxation.
Understanding China VAT
What is VAT?
Value Added Tax in China is known as “增值税” (Zēngzhíshuì). It is a consumption tax levied on the value added to goods and services at each stage of production or distribution. The tax is administered by the State Taxation Administration (国家税务总局) and was first introduced in 1984, with major reforms implemented in 2016.
How VAT Works
VAT is collected by businesses on behalf of the Chinese tax authority. Businesses charge VAT on their sales (output tax) and can reclaim VAT they pay on their purchases (input tax). The difference is paid to or reclaimed from the tax authority through periodic VAT returns. China has two types of taxpayers: General Taxpayers and Small-scale Taxpayers, with different calculation methods.
VAT Rate History
China’s VAT system has evolved significantly over time. It was initially introduced with multiple rates ranging from 8% to 45%. The system was reformed in 1994 with rates of 17% and 13%. In 2016, China completed the Business Tax to VAT reform (营改增), unifying the tax system. The rates were further adjusted in 2018 and 2019 to the current structure of 13%, 9%, 6%, and 0%.
VAT Invoices
Registered businesses must provide proper VAT invoices (增值税发票) that include specific information: their name, address, tax identification number, invoice date, description of goods or services, and the VAT rate applied. China has two types of VAT invoices: VAT Special Invoices (增值税专用发票) for input tax credits and VAT Ordinary Invoices (增值税普通发票) for other transactions.
VAT Returns
Registered businesses must file VAT returns with the tax authority. General taxpayers typically file monthly returns, while small-scale taxpayers may file quarterly returns. Returns are filed electronically through the Golden Tax System (金税系统), which is an integrated tax administration platform that monitors VAT invoices and ensures compliance.
VAT Schemes
The Chinese tax system offers different VAT schemes based on business size and type. General Taxpayers use the credit-invoice method with input tax credits. Small-scale Taxpayers use simplified calculation methods, typically applying a 3% collection rate to their sales. Certain industries and small businesses may qualify for special VAT policies, including exemptions and reduced rates.
China VAT Information for Businesses
VAT Registration
Businesses carrying out economic activities in China must register for VAT within 30 days of establishment. Registration is done through the local tax bureau. Once registered, businesses receive a tax identification number and must charge VAT on their taxable supplies, file regular VAT returns, and maintain proper records for at least 5 years (10 years for VAT invoices).
VAT Accounting
Proper VAT accounting is essential for compliance in China. Businesses must maintain accurate records of all sales and purchases, VAT invoices issued and received, and any adjustments or corrections. The Golden Tax System automatically monitors VAT invoices, making accurate record-keeping critical. Electronic invoicing is increasingly mandatory, with fapiao (发票) being the primary proof of transaction.
International VAT
Special VAT rules apply to international transactions in China. Exports are zero-rated, allowing exporters to claim refunds for VAT paid on inputs. Imported goods are subject to VAT at the time of customs clearance. Services provided to overseas customers may be zero-rated or exempt. Foreign businesses providing services in China may need to register for VAT and comply with local regulations.
Input Tax Credits
General Taxpayers can claim input tax credits on purchases used for taxable activities in China. This includes goods, services, and fixed assets. There are restrictions on claiming credits for certain expenses, such as entertainment expenses, employee benefits, and vehicles used for non-business purposes. The input tax credit system is a key feature of China’s VAT system, designed to avoid cascading taxation.
VAT Penalties
The Chinese tax authority can impose penalties for various VAT compliance failures, including late registration, late payment, late filing of returns, and errors in returns. Penalties can range from fixed amounts to multiples of the tax due, depending on the severity and frequency of the failure. Serious violations may result in additional penalties, including restrictions on invoicing and business operations.
VAT Planning
Effective VAT planning can help businesses minimize their VAT burden legally in China. This includes optimizing business structure, selecting appropriate taxpayer status, timing purchases and sales strategically, understanding input tax credit rules, and taking advantage of available exemptions and special policies. Professional advice is recommended for complex VAT situations, especially for foreign businesses operating in China.