March 2023 latest provinces join e-invoicing (e-fapiao) pilot
March 2023 saw the latest wave of regions and provinces joint the Chinese e-fapiao mandatory e-invoicing pilot. China’s State Taxation Administration (‘STA’) is continuing to expand its introduction of the special e-fapiao e-invoice system, based on national invoicing platform.
These are replacing the long-standing paper-fapiao invoices which are pre-printed for the business with special invoice numbering to control recording machines and prevent VAT fraud.
The March 2023 locations include for pre-selected existing taxpayers:
- Inner Mongolia
Previous waves have included:
- Jan 2023: Chongqing, Dalian, Qingdao, Shaanxi and Tianjin. Shanghai was further extended to new taxpayers.
- Nov 2022: Xiamen
- Oct 2022: Sichuan
- Aug 2022: Gansu, Guangxi, Guizhou, Hainan, Heilongjiang, Jilin, Liaoning, Ningxia, Qinghai, Shanxi, Tianjin, Xinjiang and Yunnan.
2020 Pilot spreading to all regions
The pilot started in September 2020 with 3 regions, Hangzhou, Ningbo and Shijiazhuang. A further 36 were added in 2021. Five more were added at the end of 2021 and a further batch through the first half of 2022. The portal has also now been updated issue and take receipt of invoices. It is expected that special e-fapiao will be compulsory for all Chinese businesses by 2023.
E-fapiao’s were first introduced into China in 2015 but could not be used for VAT deductions. The newer ‘special e-fapiao’ was initially launched in 2017 for the e-commerce, telecoms, financial and similar high-volume transaction sectors.
Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented.
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General and Special Fapiao Chinese Paper Invoice
Fapiao is a Chinese invoice which was in paper form, and historically came as two types:
- General Fapiao – an accounting voucher to evidence transactions by all businesses, including individuals. These have now largely switched to e-invoice versions.
- Special fapiao – an invoice which support the VAT element of a transactions, and provides evidence for the deductibility of VAT. Special fapiao are only produced by businesses with a turnover above RMB 5million per annum.
Paper fapiao invoices
Both invoices were in paper form. To issue an invoice, a businesses must first order blank sheets of specially templated fapiao paper from their Chinese local tax bureau within its quota every month, print the transaction information on the fapiao sheets with a special printer that is linked to and controlled by the tax system, and then seal the fapiao with a dedicated fapiao seal showing the issuer’s name and tax identification code, and other necessary information.
E-fapiao – government generated digital data invoice
The electronic fapiao is being piloted to replace the paper-based system which is proving cumbersome as the economic has expanded. E-fapiao is a digital set with a unique digital signature. It is controlled by the regional Taxation Bureaus, with invoices processed and checked via the national unified invoice application. They can be based on PDF or OFD formats, but must include QR Code. The platform generates a unique digital invoice number for each submitted invoice. The invoice is then returned to the seller and their customer through their login accounts.
With the success of general e-fapiao programs, and special e-fapiao in limited sectors, from 2020, these were extended to many other B2B areas in selected regions and cities. It is expected that most major regions will switch to mandatory special e-fapiao’s by 2022, and it will go country-wide by 2023.
Asia Pacific e-invoicing
|Country||Date||Comments (click for details)|
|Australia||Jul 2023||PEPPOL-based e-invoicing with no govt intervention B2B|
|China||Jan 2023||Special e-fapiao VAT invoice being piloted with 2023 full implementation|
|India||Oct 2020||B2B pre-clearance with separate B2C; completed Apr 2021|
|Indonesia||Jul 2015||e-Factur Pajak electronic invoicing|
|Japan||Oct 2023||Tax qualified invoices|
|Kazakhstan||Jan 2017||e-invoicing IS ESF|
|Kyrgyzstan||May 2023||Mandatory e-invoicing for goods|
|Malaysia||Jun 2024||e-invoicing pre-clearance|
|Mauritius||2023||e-invoicing System with digital transaction reporting|
|New Zealand||Mar 2022||B2G PEPPOL-based e-invoicing|
|Philippines||Jan 2024||2022 pilot of e-invoices; to follow South Korea model|
|Singapore||TBC||Mandatory B2G e-invoicing on InvoiceNow|
|South Korea||2011||Near real-time invoice reporting|
|Taiwan||2017||Electronic GUI invoices; non-residents since 2020|
|Thailand||2018||E-invoice reporting where adopted|
|Vietnam||Nov 2021||Pre-clearance B2B verification code e-invoice|