Understanding Chinese Invoice Requirements
Navigating Chinese invoicing means understanding the "Fapiao" system, which is China's mandatory legal invoice. This system, overseen by the State Taxation Administration (STA), is crucial for Value-Added Tax (VAT) compliance and serves as official proof of purchase. Since December 2024, e-fapiao has become mandatory for B2B and B2G transactions nationwide, managed through the Golden Tax System III.
Key compliance specifics include:
- Fapiao Content: Each e-fapiao must contain the invoice number, issuance date, comprehensive buyer and seller details (including Taxpayer Identification Number, registered address, and bank account), project name, specifications, quantity, unit price, amount, applicable tax rate, tax amount, and total in both words and figures. A dynamic QR code and an electronic signature are also mandatory.
- VAT Rates: China operates a VAT system with a standard rate of 13%, and reduced rates of 9% and 6% for specific goods and services. Small-scale taxpayers typically face a 3% VAT rate.
- Currency Formatting: The official currency is Renminbi (RMB), with Yuan (CNY) as its basic unit. The official symbol is ¥. For domestic transactions, use CNY, while CNH is designated for international trade involving Yuan Renminbi. Non-compliance with Fapiao requirements can lead to significant penalties.