E-invoicing model:
  • Centralized (Planned)
Mandatory file format:
  • OFD/Fully Digitized E-Fapiao (Pilot)
B2G requirements:
  • STA
Archiving requirements:
  • 30 Year Period
E-signature:
  • Mandatory

Summary

Navigating the global tax compliance landscape successfully is complex and resource-intensive. Every country has a specific and constantly evolving set of legislated e-invoicing requirements.

Non-compliance, intentional or not, can result in significant financial penalties, business disruption, and reputational damage.

Updates

09.12.22

  • Country updates
Further expansion of the Fully Digitized e-fapiao As announced by the Chinese State Tax Administration (STA), the scope of recipients for fully digitized e-fapiao will be extended to 15 more provinces from 28 August 2022. In other words, all taxpayers in China are now able to receive fully digitized e-fapiao issued by pilot taxpayers from Guangdong, Shanghai, and Inner Mongolia.   Additionally, a new feature has been added to the national e-portal, which enables pilot taxpayers to issue the fully digitized e-fapiao in batches by uploading the invoice data in a standardized Excel file.  Fully digitized e-fapiao has the same legal effect as paper fapiao and standard e-fapiao, with the originals required to be stored in China for 30 years. 

08.19.22

  • Country updates
Developments on the fully-digitalized e-fapiao system The fully digitalized e-fapiao system has progressed swiftly since its launch, below is a timeline of key events:
  • Dec 2021: China kicked off the Fully digitized e-invoice pilot with selected taxpayers in Guangdong, Inner Mongolia, and Shanghai. taxpayers should use the dedicated e-invoicing portal to issue and transmit fully digitized e-invoice.
  • April 2022: the pilot expanded further in Guangdong and Inner Mongolia.
  • May 2022: Taxpayers in Sichuan joined the pilot as “Receiver”, receiving fully digitized e-invoice from taxpayers in Guangdong, Inner Mongolia and Shanghai.
  • June 2022: State Tax Administration (STA) announced an expansion of the "Receiver" scope across the country in phases.
  • June 2022: the STA announced that 5 more provinces (Shenzhen, Beijing, etc) to join the pilot as “Receiver” starting on 21 June
  • July 2022: the STA further confirmed 9 more provinces to participate the pilot as “Receiver” from 18 July
Although the STA intends to achieve fully invoice digitization by 2025, the top-tier provinces are expected to reach the goal earlier. We are closely monitoring the developments in China and will continue to inform our customers of any updates.

02.04.22

  • Mandate information
The launch of “Fully Digitalised e-fapiao” pilot programme

China has launched a new pilot programme introducing “Fully digitalized e-invoice”, this is an important initiative to comprehensively promote the digital upgrade and intelligent transformation of tax collection and management, with the goal of achieving 100% invoice digitalization across the country by 2025. The pilot was first implemented on 1st December 2021, with selected taxpayers in Shanghai, Guangdong, and Inner Mongolia.

There are two types of fully digitalized e-invoice: fully digitalized special VAT e-invoice and fully digitalized general VAT e-invoice, which have the same legal effect as the paper invoice and the normal e-invoice currently in use. To remind you of the differences between General and Special VAT invoices:

  • General VAT Invoice: This invoice type does not allow for VAT deduction and is typically used for B2C and tax-free transactions. The General VAT Invoice is a simplified invoice type and paperless has been allowed for years for general VAT invoices
  • Special VAT Invoice: This invoice types allows for VAT deduction, and is typically used for B2B transactions

A major upgrade in this pilot is the elimination of special tax control equipment (e.g. UKEY), pilot taxpayers will instead use a national unified e-tax service platform to issue, deliver and validate e-Fapiao24/7 for free. Once the invoice data is entered in the system, the platform will issue a unique invoice number, meaning that taxpayers no longer need to apply for invoices via their local tax bureau. In addition, this platform creates a Tax Digital Account for each taxpayer, which automatically collects invoice data, allowing taxpayers to search, print, and download invoices from the platform.
The e-tax service platform aims to serve as a one-stop shop for all invoicing needs, it will be also available in the form of software and mobile app in the near feature. Furthermore, this pilot has abolished the OFD file format requirements, pilot taxpayers can send the fully digitalized e-invoice through their Tax Digital Account, QR code, or by email.

While fully digitalized e-invoice is still in the pilot stage, we expect widespread promotion and implementation soon. It is recommended that enterprises continue to pay close attention to the latest developments and evaluate the potential impact on their business. Of course, Tungsten Network will stay close to China’s e-invoicing pilots, and we will keep you up to speed.

08.08.21

  • Country updates
Looking to achieve nationwide coverage of fapiao digitisation by 2025

China has set to roll out e-special VAT fapiao to all taxpayers by the end of 2021, with the expectation to achieve nationwide e-fapiao coverage by 2025.

The STA (State Tax Administration) has launched a public e-invoicing platform aiming to provide free e-invoicing support 24/7 (inv-veri.chinatax.gov.cn). Suppliers/Buyers can access this website to:

  • perform validation checks on both paper and electronic invoices issued within the last 5 years. Each invoice can only be checked 5 times per day.
  • download relevant certificates and software, e.g. OFD reader, e-invoice generator for UKEY users.
  • learn more about e-invoicing in china via online resources, e.g. how to identify the validity of paper fapiao.

It’s noticeable that this platform has access restrictions to foreign browsers and may not work on Apple IOS systems.

02.23.21

  • Country updates
China expands its e-invoicing pilot program

In December, China’s State Taxation Administration (STA) announced further expansion of the trial programme (Pilot) to 38 regions in the country. The pilot enables specific Chinese taxpayers to issue VAT special electronic invoices on voluntary basis. The pilot project started in September 2020.

Read more

02.23.21

  • Country updates
China expands its e-invoicing pilot program

In December, China’s State Taxation Administration (STA) announced further expansion of the trial programme (Pilot) to 38 regions in the country. The pilot enables specific Chinese taxpayers to issue VAT special electronic invoices on voluntary basis. The pilot project started in September 2020.

Read more

01.02.21

  • Country updates
Special VAT e-Fapiao pilot extension 

China’s e-invoicing pilot for Special VAT invoices is gaining traction quickly. The pilot was already live in 11 regions and has now been extended into another 25 regions. The project is somewhat delayed; e-invoicing is now expected to be available countrywide in the course of 2021. (The original plan was to have full country coverage by the end of 2020).

The Special VAT e-invoicing initiative aims to replace the existing Fapiao process, which is fully paper-based, and which requires taxpayers to use government pre-numbered invoices and visit local tax offices to produce such invoices.

Businesses are typically selected and certified for the pilot. Certified companies use the State “Public Service Platform of Electronic VAT Invoice” using their ‘U Key’ login terminal, which is a hardware component provided by local tax offices. On the Public Service Platform taxpayers request approval for the type and number of sales invoices they will issue in a certain period. The Public Platform is also used for the permanent storage of invoices. Invoice corrections (credit notes) can also be issued using the Service Platform (using red-lined special Fapiaos).

03.09.20

  • Country updates
China moves forward with plans to improve VAT law functionality

The Chinese State Tax Administration (STA) provided a public update on multiple tax-related topics, including a development plan for electronic special VAT invoices.

03.09.20

  • Country updates
China moves forward with plans to improve VAT law functionality

The Chinese State Tax Administration (STA) provided a public update on multiple tax-related topics, including a development plan for electronic special VAT invoices.

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