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China Promotes Electronic VAT Invoice Nationwide

The State Administration of Taxation recently issued an announcement saying that the electronic value-added tax (VAT) invoice system would be promoted nationwide as from 1 December 2015.

Electronic invoices are proof issued or received for receipts and payments. Unlike traditional paper invoices, electronic invoices allow taxpayers to apply for, issue, transfer and check the invoices through the unified online electronic invoice management system of the tax authorities.

Electronic invoices have three major characteristics:

Useful in helping enterprises reduce operating costs. Since electronic invoice is not carried by a paper medium and does not incur production, printing, storage and postage costs, enterprises can save the relevant expenses.

Useful in helping consumers keep and use invoices. Consumers can receive electronic invoices during business transaction, search for and verify the information on the invoice on the tax authority's website, and download or print out electronic invoices.

Useful in helping the tax authority in management and data application. After an electronic invoice is issued by an enterprise, the information will immediately be sent to the tax department. Tax officials can promptly make enquiries, collect statistics and analyse the data of individual invoices and identify tax-related irregularities.

The announcement stated that should the issuer and addressee of general electronic VAT invoices require paper invoices, they may print out the layout files of these invoices, which would have the same legal force, basic usage and basic use regulations as the general VAT invoices issued by the tax authority.

Beijing, Shanghai, Zhejiang and Shenzhen started their trial run of the electronic VAT invoice system on 1 August 2015.

Content provided by Picture: HKTDC Research
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