VAT in China guide
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Chinese VAT for digital service providers
The imported commodities retailed through cross-border e-commerce shall, according to the types of goods, be subject to import VAT. Individuals purchasing any imported goods retailed through cross-border e-commerce shall be taxpayers; the actual transaction prices shall be a dutiable price; and e-commerce corporations, corporations specialized in e-commercial transaction platforms or logistic enterprises can be the withholding agent for VAT.
Sales of goods and the provision of processing, repair or replacement services are generally subject to 16% VAT. Certain goods are subject to a reduced rate of 10%. VAT pilot services are subject to the following rates: 5%, 6%, 10% or 16%, depending on the nature of the services. The 3% rate applies to supplies covered by the simplified VAT calculation methods or supplies made by small-scale VAT taxpayers (small businesses).
Late – registration penalties
The VAT regulations in China do not contain any penalty provision for late VAT registration. But there are penalties for small-scale VAT taxpayers who do not register as general VAT taxpayers in time when their annual taxable sales amount exceeds the threshold.