State Taxation Administration issued Announcement No. 2 of 2026, effective 1 January 2026, introducing stricter rules for general VAT taxpayer registration with retroactive effect. Taxpayers exceeding the small-scale sales threshold must register (with limited exemptions), certain sectors are mandatorily included, and late registration leads to automatic backdated reclassification and filing corrections. Transitional rules abolish the guidance period and allow offset or refund of excess prepaid VAT, increasing compliance risk for businesses near the threshold
China VAT Alert: New Mandatory Registration Rules and Retroactive Compliance Requirements
Public
Other countries
Author: Ljubica Blagojević
Category:
General information
Views:
1514
Content accuracy validation date:
19.01.2026
Content accuracy validation time:
08:34h
Who must register
- Taxpayers whose annual taxable sales exceed the small-scale taxpayer threshold (RMB 5 million, approx. €614,877) must register as general VAT taxpayers, unless expressly exempt.
- Exemptions: natural persons and non-enterprise units that do not regularly engage in taxable activities may remain small-scale taxpayers.
- Mandatory registration regardless of turnover applies to certain sectors, including:
- State-owned grain purchasing and sales enterprises
- Gas stations
- Air transport enterprises applying consolidated VAT payment
Voluntary registration
- Taxpayers below the threshold may voluntarily register if their accounting is sound and tax data is reliable.
- The effective date is retroactive to the first day of the registration period, requiring correct VAT treatment and filing from that date onward.
Threshold monitoring and timing
- “Annual taxable sales” are calculated over any consecutive 12-month or four-quarter period, including periods with zero sales.
- Occasional transfers of real estate or intangible assets are excluded.
- Adjustments from audits or self-corrections are allocated to the original tax period in which the VAT obligation arose.
Retroactive registration and corrections
- If sales adjustments retrospectively breach the threshold:
- Registration must be completed within 10 working days
- Prior small-scale VAT returns must be corrected period by period
- Input VAT deduction vouchers obtained after the effective date (or obtained later but relating to that period) may still be claimed
- For adjustments relating to 2025 or earlier, the earliest effective date is 1 January 2026.
Non-compliance consequences
- Failure to register on time results in automatic classification as a general VAT taxpayer after 5 working days, with the effective date still backdated, increasing VAT exposure and correction obligations.
Status changes and documentation
- Taxpayers who no longer meet small-scale eligibility due to business changes must report promptly or will be reclassified by the tax authority.
- Supporting documents (accounting records, transaction evidence, eligibility explanations) must be retained for inspection.
Transitional rules
- Taxpayers exceeding the threshold in Q4 / December 2025 and filing in January 2026 become general taxpayers from 1 January 2026.
- From 2026:
- The general VAT taxpayer guidance period is abolished
- Excess prepaid VAT from additional special VAT invoices may be offset or refunded
The Announcement significantly tightens VAT status control, introduces strict retroactivity, and increases the compliance risk of delayed registration. Businesses close to the threshold must implement continuous turnover monitoring and timely VAT status management from 2026 onward.
Other news from Other countries
Saudi Arabia: ZATCA Launches Wave 23 of E-Invoicing (Phase 2)
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
ZATCA's Wave 23 of Phase 2 e-invoicing integration targets VAT-registered businesses in Saudi Arabia with taxable turnover over SAR 750,000 for 2022-2024. Integration with Fatoora must be completed by 31 March 2026. Requirements include API connectivity, compliant invoice formats, QR codes, and real-time reporting. Early preparation aids compliance and operational efficiency. ZATCA has announced W... Read more
Saudi Arabia: Complete Guide to ZATCA Phase 2 E-Invoicing Waves 18–22 (2026)
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
Saudi Arabia's ZATCA Phase 2 e-invoicing mandates VAT-registered businesses to integrate invoicing systems with the Fatoora platform, generating XML invoices and enabling real-time reporting. Phases 18–22 target progressively smaller businesses from 2023 to 2026, requiring compliance with new standards. Core requirements include secure XML invoices, cryptographic stamps, QR codes, and real-time re... Read more
UAE: TRN vs. VAT Number: What’s the Real Difference?
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
In the UAE, the Tax Registration Number (TRN) and VAT number are a single 15-digit code issued by the FTA, necessary for VAT compliance. Registration is mandatory for taxable turnover exceeding AED 375,000, with voluntary registration allowed at AED 187,500. Operating without a TRN or using an incorrect one may incur penalties up to AED 5,000. The TRN is essential for charging and reclaiming 5% VA... Read more
Vietnam: Official Guidance on VAT, Invoicing, Sales Discounts, Returned Goods, and Input VAT Corrections
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
The Department of Taxation's letter No. 2193/CT-CS (April 8, 2026) specifies VAT invoice guidance: TIN not required for buyers without one. Sales discounts require VAT refunds and additional declarations for returned goods. Corrections for missing input VAT may be submitted prior to audits, impacting tax payable or refundable VAT. The Department of Taxation's official letter No. 2193/CT-CS, dated... Read more
UAE Businesses Urged to Prepare for Mandatory E-Invoicing as July 1 Deadline Approaches
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
UAE businesses must prepare for mandatory e-invoicing by July 1, 2026, selecting accredited service providers. The phased rollout starts January 1, 2027, enhancing VAT processing with structured, real-time invoice formats. UAE businesses are entering a critical preparation phase for mandatory e-invoicing, with July 1, 2026 set as the main deadline to select an accredited service provider (ASP). T... Read more
UAE Launches Optional B2B Peppol 4‑Corner E‑Invoicing
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
The UAE launched an optional B2B 4-corner Peppol e-invoicing framework, allowing suppliers and buyers to exchange structured invoices via Accredited Service Providers. This model precedes the mandatory 5-corner system in 2027, integrating the Federal Tax Authority. Businesses must comply with Peppol standards via the EmaraTax platform, ensuring early adoption for smoother transitions and complianc... Read more
Colombia’s Electronic Invoicing (E-Invoicing) Regime – Concise Briefing
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
Colombia has a comprehensive real-time e-invoicing system overseen by DIAN, requiring digitization of commercial transactions. All VAT-registered businesses must issue Factura Electrónica de Venta (FEV) for B2B and B2G transactions, with real-time clearance mandated since November 2020. Consumers also receive electronic receipts. Exports utilize a special electronic invoice, while imports require... Read more