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 $75,000 | |
Azerbaijan | 12% | Jan 2017 | – | |
Armenia | 20% | Jan 2022 | AMD 115million | |
Bangladesh | 5% - 15% | Jul 2019 | – | B2B and B2C |
Bhutan | 7% | Jul 2021 | Nu 5million | |
Cambodia | 10% | Mar 2022 | KHR 250m | |
China | 6%-13% | N/a | Nil | Withholding VAT; B2B and B2C |
Fiji | 9% | TBC | FJD 300,000 | |
India | 18% | Jul 2017 | - | |
Indonesia | 11% | Aug 2020 | IDR600m or 12k customers | |
Japan | 10% | Oct 2015 | JPY 10 million | |
Kazakhstan | 12% | Jan 2022 | Nil | |
Kyrgyzstan | 12% | Jan 2022 | Nil | |
Laos | 7% | Feb 2022 | LAK 400m | |
Malaysia | 6% | Jan 2020 | RM500,000 | |
Nepal | 13% | Jul 2022 | Rupees 2m | Also 2% DST |
New Zealand | 15% | Oct 2016 | NZD 60,000 | |
Pakistan | 2% | Sep 2021 | Nil | Marketplace Withholding VAT |
Philippines | 12% | Jul 2023 ? | P 3million | |
Singapore | 7% | Jan 2020 | S$ 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 | – |