Guide to China VAT Taxability and Rates

How Taxability Is Determined

In China, VAT is determined at the country level. The taxability of a transaction is based on whether the goods or services are consumed within China — consistent with the "place of consumption" principle under the 2026 VAT Law.

For SaaS companies, this is straightforward: SaaS services are subject to a 6% VAT rate, regardless of whether the transaction is B2B or B2C.

VAT Rates for SaaS

Important: The 6% rate applies to resident businesses. Non-resident businesses without a physical presence in China are not required to register or charge VAT.

Special Tax Rate Regions

China does not have special tax rate regions. The same VAT rates apply uniformly across all provinces and municipalities.

Tax ID Format

Upon VAT registration, a business is assigned a Unified Social Credit Code (USCC), which also functions as its VAT identification number.

• Format: 18 alphanumeric characters (e.g., 91310106MA1U123A5Q)

• The last character is a check digit.

USCC Structure:

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