Keeping up with Compliance | China

 

For the past eight years, China has been adjusting and attempting to improve the functionality of its VAT laws, culminating in the news of further VAT reform announced in February – which is considered by many to be a consolidation of many of those smaller improvements.

In a press conference on February 27th, 2020, the Chinese State Tax Administration (STA) provided a public update on multiple tax-related topics, including a development plan for electronic special VAT invoices.

This indicates considerable movement from the fully paper-based special VAT invoice that is in practice today, to an electronic alternative.

The decision is rooted in several benefits. Firstly, to the legal system of taxation in China, whilst also increasing public legal participation, reinforcing social consensus on the issue and finally in promoting scientific legislation.

 

The latest

From the information released, the understanding is that the STA aims to launch the electronic special VAT invoice by the end of 2020 – reflecting similarly short timelines in other countries for e-invoicing mandates.

The STA announced a pilot program for the use of electronic special VAT invoices. However, the detailed implementation requirements are yet to be confirmed, and system developments have not been finalized.

It is also likely that this pilot program will be conducted in selected locations or market segments, although this has not been confirmed yet.

We will continue to monitor the developments in China carefully and keep you posted as timelines and requirements become more evident.

 

In the meantime

While we monitor all the various mandates and changes occurring globally, you can still learn about some of the more concrete invoicing compliance changes world-wide. I hosted a Compliance Nightmares webinar on March 12th, in which I explored the pitfalls of non-compliance and how to negotiate the changing regulatory landscape.

Listen to the ‘Compliance Nightmares’ replay

 

Source: PwC

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