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China VAT on foreign digital services

Mainland China places the Value Added Tax responsibilities for non-resident sourced digital or electronic onto the Chinese resident customer. This applies to both B2C and B2B. There is no facility for non-residents to register for VAT. Non-resident providers of digital services should consider the likelihood that their customer will impose Withholding VAT on the payment, and may wish to charge a VAT inclusive price even though they are not VAT registered.

The current VAT rate in China is 13%. However, there is extensive use of the reduced rates: 9%; 6%; 3%. Follow VAT Calc’s global VAT and GST on digital services tracker for live updates on worldwide reforms.

VAT on foreign goods is therefore collected as import VAT – rather than it being assessed by the provider at the point-of-sale. Chinese recipients for such services must self-assess the VAT due via declarations to the XXXX. In reality, this does not happen often.

Chinese Withholding VAT

Chinese marketplaces and intermediaries will typically act as a VAT withholding agent. There is no reverse charge / zero-rating operation on foreign digital services to businesses or consumers.

China does impose a range of Withholding VAT requirements on resident purchasers for foreign supplies. Non-residents should therefore be wary of losing part of their revenues as irrecoverable tax since they cannot VAT register in China.

VAT Calc’s in real-time VAT Calculator and Auditor  services produce instant and accurate Chinese of other country VAT calculations into your ERP, billing, e-commerce or e-invoicing systems.

Asia Pacific VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Australia 10% Jul 2017 AUD $75,000
Azerbaijan 12% Jan 2017
Armenia 20% Jan 2022 AMD 115million
Bangladesh 5% - 15% Jul 2019 B2B and B2C
Bhutan 7% Jul 2021 Nu 5million
Cambodia 10% Mar 2022 KHR 250m
China 6%-13% N/a Nil Withholding VAT; B2B and B2C
Fiji 9% TBC FJD 300,000
India 18% Jul 2017 -
Indonesia 11% Aug 2020 IDR600m or 12k customers
Japan 10% Oct 2015 JPY 10 million
Kazakhstan 12% Jan 2022 Nil
Kyrgyzstan 12% Jan 2022 Nil
Laos 7% Feb 2022 LAK 400m
Malaysia 6% Jan 2020 RM500,000
Nepal 13% Jul 2022 Rupees 2m Also 2% DST
New Zealand 15% Oct 2016 NZD 60,000
Pakistan 2% Sep 2021 Nil Marketplace Withholding VAT
Philippines 12% TBC P 3million
Singapore 7% Jan 2020 S$ 100,000
South Korea 10% Jul 2015 Nil
Taiwan 5% May 2017 NTD 480,000
Tajikistan 18% Jan 2021
Thailand 7% Sep 2021 1.8m Baht
Uzbekistan 15% Jan 2020 Nil
Vietnam 10% Dec 2020

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