China’s 2026 tax reform will keep domestic service enterprises exempt from VAT and introduce several other incentives. The policy also allows social insurance contributions to be deducted from taxable income, offers preferential corporate income tax rates for eligible firms, and provides personal income tax deductions to spur household demand.
They may benefit from a reduction or exemption of VAT on income derived from providing domestic services.
Social insurance contributions paid by enterprises for their employees are deductible when calculating taxable income.
Yes, eligible home service enterprises may benefit from preferential corporate income tax rates.
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Yicai Global · about 8 hours ago
Chinese authorities have advanced the timing of VAT payments for firms that collect money before delivering services, requiring tax on the full amount received earlier. The change may push businesses over the CNY5 million threshold, forcing a switch to general VAT taxpayer status.
Bloomberg Tax · about 8 hours ago
The Chinese Ministry of Finance issued Announcement No. 9/2026 on January 31, 2026, defining the goods and services subject to the 9% VAT rate. The policy lists a wide range of agricultural products, utilities, media, and real estate transactions that will be taxed at this rate.
Bloomberg Tax · 1 day ago
The Chinese Ministry of Finance issued Announcement No. 15/2026 on Feb 2 2026, outlining interim measures for input VAT deductions on long‑term assets. The measures clarify the scope of long‑term fixed assets, set a 5 million‑yuan threshold for mixed‑use assets, and define the adjustment period for deduction. These rules apply to assets acquired from Jan 1 2026 or recognized before Dec 31 2025.
Bloomberg Tax · 1 day ago
China’s Ministry of Finance issued Announcement No. 11 on 31 January 2026, establishing new VAT and consumption tax rules for exported goods and cross‑border services. The announcement, effective 1 January 2026, sets criteria for VAT exemption, outlines refund rates and formulas, specifies consumption‑tax exemptions, and requires export tax refunds to be claimed within 36 months. It also repeals earlier notices.
Mobile World Live · 2 days ago
China’s government has reclassified mobile data, broadband access, SMS and MMS as basic telecom services, raising the VAT rate from 6% to 9%. HSBC estimates the hike will reduce China Mobile’s 2026 net profit by 6%, China Telecom’s by 12% and China Unicom’s by 13%, with overall earnings for operators falling 6% to 13%. The change is expected to affect mobile operators’ revenue streams significantly in 2026.
Mobile World Live · 4 days ago
China’s Ministry of Finance and State Taxation Administration has reclassified certain telecom services, raising the VAT rate from 6% to 9% on mobile data, SMS, MMS, and broadband access. The change takes effect from the beginning of 2026, prompting operators to consider price adjustments or bundle redesigns to mitigate revenue impacts.
