China

China

Explore the requirements and rules that apply to electronically supplied services in China.

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The great wall of China

Registration requirements and timing

For B2B; Is a non-resident vendor, without permanent establishment, selling cross-border electronically supplied services to a B2B customer located in your jurisdiction required to register for and charge VAT/GST?

No

 

For B2C; Is a non-resident vendor, without permanent establishment, selling cross-border electronically supplied services to a B2C customer located in your jurisdiction required to register for and charge VAT/GST?

No, in China’s VAT system, there is no VAT registration requirement for oversea companies.

When an overseas company provides service to Chinese purchaser, it could not register as a VAT taxpayer and pay VAT directly in China.

Instead, the VAT will be collected through the withholding mechanism as below:

  1. If the overseas company has an operating agency in China, the operating agency will withhold VAT on behalf of the oversea company.
  2. If the oversea company has no operating agency in China, the Chinese purchaser should withhold VAT on behalf of the oversea company.

For digitized services, there is no special treatment, it also apples to above general regulations by now.

 

If there is not a requirement to register B2B , is there either

  • a scheduled introduction of such a requirement,
  • a draft legislative proposal to introduce such a requirement, 
  • a general proposal or review by the authorities of whether to introduce such a requirement. If yes, please specify

None of the listed

 

If there is not a requirement to register B2C , is there either

  • a scheduled introduction of such a requirement,
  • a draft legislative proposal to introduce such a requirement,
  • a general proposal or review by the authorities of whether to introduce such a requirement. If yes, please specify

None of the listed

 

If your country requires non-resident sellers of e-services to register for VAT/GST, when did/will those rules come into effect?

No requirement exists

 

If there is no requirement to register (i.e Q1 reply is no); are electronically supplied services by a non-resident vendor subject to a VAT withholding mechanism by the customer (e.g., Russia on B2B supplies and Colombia on B2C supplies)

Yes

Scope of what is taxed

Does the requirement to register apply only to B2C transactions, or to both B2C and B2B transactions?

B2C & B2B

VAT withholding applies

 

Do the requirements apply to all services provided electronically?

Yes, VAT withholding applies

 

Do the requirements apply to digital streaming of content (audio, image, video)?

Yes, VAT withholding applies

 

Do the requirements apply to digitally supplied software and apps

Yes, VAT withholding applies

 

Do the requirements apply to cloud storage?

Yes, VAT withholding applies

 

Do the requirements apply to internet based voice communication services e.g. VoIP?

Yes, VAT withholding applies

 

Do the requirements apply to telecom services?

Yes, VAT withholding applies

 

Do the requirements apply to digital streaming of content?

Yes, VAT withholding applies

 

Do the requirements apply to broadcasting services?

Yes, VAT withholding applies

 

Do the requirements apply to any services NOT mentioned in the previous sections? If so which ones?

Yes, VAT withholding applies

 

For further information please contact

Leo Liao
Tax Manager
T +861085087518; Ext - 6107518
E leo.liao@kpmg.com

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