Under China's new VAT Law effective January 1, 2026 (implemented via MOF/State Taxation Administration Announcement [2026] No. 10, issued January 30, 2026), small-scale taxpayers with monthly sales at or below RMB 100,000 (or RMB 300,000 quarterly) are exempt from VAT through December 31, 2027 - a threshold now written into statute rather than a temporary concession. Those on the 3% levy still benefit from a reduced 1% rate, and the per-transaction exemption for individuals doubled from RMB 500 to RMB 1,000.
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China's new VAT Law makes RMB 100k/month sales tax exemption permanent for small firms
Why this matters for founders
A founder running an early-stage company registered as a small-scale VAT taxpayer (annual sales under RMB 5 million) can keep monthly billings under RMB 100,000 to stay fully VAT-exempt, or opt to waive the exemption and issue special VAT invoices when B2B clients need input-tax credits.
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