China – State Council Adopts Implementing VAT Regulations 

The China State Council adopted the VAT Implementing Regulation (Regulation) on December 19, 2025. The Regulation sets enforcement procedures for a significant part of the updated VAT Law enacted in December 2024. The Regulations, in addition to the enforcement rules, elaborate in detail on different tax provisions introduced by the VAT Law. 

The Regulations are divided into six chapters, consisting of 54 articles, each with a specific set of rules. It is designed to enhance the effective enforcement of the updated VAT Law by providing detailed regulations for each provision introduced previously, which had previously lacked clarity. 

Key takeaways 

• Detailed explanations on what constitutes taxable goods, taxable services, and intangible assets 
• Clarification on who is considered a taxable person under the VAT Law 
• Clarification of the imposition of VAT rates 
• Types of supplies or provision of services that can be treated as zero-rated supply or tax-exempt 
• Rules for the proper calculation of tax payable 
• Responsibility for tax collection for cross-border transactions 

The adopted VAT Implementing Regulation, which came into force on January 1, 2026, together with the updated VAT law, is a cornerstone of the China VAT framework. Taxable persons that are in scope of the newly introduced VAT regime should carefully consider both pieces of legislation, which effectively complement each other.