Regulatory updates - China

China continues to advance its invoice digitalization strategy, with multiple local tax authorities announcing the discontinuation of paper invoices and the expansion of fully digitalized e-invoices. The transition forms part of broader tax administration reforms aimed at reducing administrative costs, improving tax compliance, and promoting digital transformation across the economy.

Phase-out of paper invoices

China continues to advance the replacement of paper invoices with fully digitalized e-invoices across various sectors and regions. In many cases, taxpayers were no longer permitted to issue existing paper invoices after June 30, 2026, although invoices issued before that date remain legally valid.

In Zhejiang Province, the State Taxation Administration (STA) announced that provincial-level invoices would be phased out entirely. Tax authorities stopped accepting applications for the issuance and printing of such invoices on April 30, 2026, while the issuance of provincial-level invoices ceased on June 30, 2026. E-invoices have replaced these invoices and are issued through designated government platforms.

According to the Dalian Municipal STA's announcement issued on 1 June 2026, certain Dalian tax-supervised invoices will be discontinued and replaced by fully digitalized e-invoices effective 1 July 2026.

Expansion of fully digitalized e-invoices

China’s fully digitalized e-invoice framework provides invoices with nationally unified numbering, automated issuance capabilities, and direct data exchange between taxpayers and tax authorities through digital tax accounts. These invoices have the same legal validity as paper invoices while enabling end-to-end electronic processing.

As it was previously reported, the fully digitalized e-invoice was fully implemented nationwide on December 1, 2024. Since then, tax authorities have continued encouraging taxpayers to migrate to e-invoices and reduce reliance on paper-based processes.

Future outlook

These developments indicate that China is moving beyond the nationwide adoption of e-invoices and into a new phase focused on the gradual elimination of paper-based invoicing, in line with its broader strategy for the digitalization of tax collection and administration. While the pace of implementation varies by region and industry, recent measures demonstrate a clear policy direction towards expanding e-invoicing, reducing reliance on paper invoices, and establishing fully digitalized e-invoice as the primary invoicing method across the economy.

On December 19, 2025, the State Council passed the Implementing Regulations for the VAT Law (Regulations), which are an essential part of the VAT legal framework and a key safeguard for the effective enforcement of the VAT Law.

Key features of the Regulations

• Maintaining stability: Most existing rules remain unchanged, avoiding additional burdens for businesses. For instance, the scope of taxable items, deduction rules, and export tax refunds remain the same, with some refinements, such as treatment of loan interest deductions.

• Clarifying VAT Law provisions: Detailed interpretations include definitions of taxable goods and services, principles for applying multiple tax rates, and rules for input tax deductions.

• Optimizing tax policy: The Regulations align with international standards and ensure fairness. For instance, input VAT cannot be deducted for purchases used in non-taxable activities, and Special VAT fapiao should not be issuedin these cases.

• Updating administration measures: Clear deadlines for natural persons to declare tax and introduce withholding obligations for taxpayers in certain casesaim to reduce compliance burdens.

The Regulations will take effect on January 1, 2026.

On September 8, the Chinese Government published an announcement confirming the full transition to electronic invoices for national electronic railway passenger tickets from October 1, 2025.

This follows a transition period between November 2024 and September 30, when both paper reimbursement vouchers and electronic invoices have been used in parallel.

Electronic passenger railway tickets have been fully implemented since 2020.