China Fapiao & VAT Invoice Guide for Foreign Businesses (2026)

Foreign companies quickly discover that a fapiao in China is an official China VAT invoice, not simply a seller-designed commercial invoice or a payment receipt. For teams looking up the fapiao meaning, the key point is that it is a tax-controlled voucher issued through China’s official invoicing system. The type issued, the rate shown, the buyer information, the underlying transaction, and the way the document is used can affect VAT, expense evidence, accounting, and tax risk.

Consider a common scenario. A newly registered consulting WFOE pays an office supplier, receives a PDF marked “invoice,” and assumes the document can reduce its VAT payable. The seller has actually issued a general VAT invoice, while the buyer is a general VAT taxpayer that expected a special VAT invoice. The cost may still be a real business expense if properly supported, but that document does not normally create the expected input VAT credit. The commercial agreement, payment, delivery, accounting entry, and tax invoice need to be planned together.

TL;DR: the 2026 fapiao rules in brief

• China’s main VAT rates are 13%, 9%, and 6%, with a 0% rate for specified cross-border supplies. Simplified calculation generally uses a 3% collection rate, subject to current relief.
• A VAT small-scale taxpayer is generally an entity whose annual VAT-taxable sales do not exceed RMB 5 million. Through December 31, 2027, eligible small-scale taxpayers have a monthly exemption threshold of RMB 100,000, or RMB 300,000 for quarterly filers, and taxable sales otherwise subject to 3% can generally use a temporary 1% collection rate.
• A compliant special VAT invoice can normally support an input VAT credit for a qualified general taxpayer. A general VAT invoice usually cannot, apart from limited statutory exceptions and other prescribed deduction vouchers.
• Fully digitalized e-invoices are the nationwide default direction. They have the same legal effect as paper invoices, use a 20-digit invoice number, and operate through a total invoicing quota rather than a per-invoice paper limit.
• A fully digitalized invoice generally cannot be voided. Corrections use the red-letter invoice workflow.
• VAT credit depends on both the voucher and the real transaction. A valid-looking invoice cannot cure a missing or fictitious transaction.

This guide is a general compliance overview, not a transaction-specific tax opinion. Confirm the current treatment for the company, locality, industry, invoice type, and transaction before filing.

1. What Is a China VAT Invoice (Fapiao)?

In everyday English, “invoice” often means a bill created by a supplier. In China, that commercial document and the tax-administered fapiao are related but not interchangeable. The fapiao vs invoice distinction matters because only the prescribed tax voucher can perform the relevant VAT and tax-evidence functions.

A fapiao is an official tax voucher issued through the tax authority’s invoicing system under China’s invoice administration and VAT rules. It records a taxable transaction in a standardized form. Businesses use it in VAT reporting, accounting, reimbursement, tax reviews, and transaction substantiation. A seller may also provide a contract, quotation, order form, delivery note, statement, or receipt; those documents do not automatically replace the required fapiao.

The distinction matters in three ways:

1. Tax amount and price are separate concepts. China’s VAT is generally calculated separately from the VAT-exclusive sales amount. A contract should state whether a price includes VAT, which invoice type will be issued, and how a tax-rate change affects the price.
2. Input VAT credit requires a prescribed voucher and qualifying use. A buyer cannot claim input VAT merely because it paid a supplier or received a document titled “invoice.”
3. The transaction must be real. Contracts, delivery, services, fund flows, invoice information, and accounting should support one another. An official invoice number does not validate a fictitious or mismatched transaction.

The Value-Added Tax Law of the People’s Republic of China, effective January 1, 2026, gives electronic VAT special invoices and paper VAT special invoices equal legal effect under Article 34. This supports the shift from paper-based control to electronic, transaction-level data without reducing the buyer’s duty to verify the substance of the transaction.

Foreign founders should therefore ask two separate questions before signing a purchase contract: “What commercial document will we receive?” and “What tax invoice or prescribed deduction voucher will support the VAT and accounting treatment?”

2. China VAT rates and taxpayer status in 2026

The rate is determined by the nature of the supply and the applicable VAT rules, not simply by the business’s label or the rate it prefers to print.

Main treatment	Typical scope under the VAT Law	Practical invoice point
13% VAT rate	Sale or import of most goods; processing, repair, and replacement services; specified leasing	Common for trading and manufacturing, subject to product classification and special rules
9% VAT rate	Transportation, postal, basic telecommunications, construction, real-property leasing, sale of real property and land-use rights; specified goods	Classification, place of supply, and mixed transactions need review
6% VAT rate	Most modern and other services, financial services, value-added telecommunications, and transfers of specified intangible assets	Common for consulting and professional services, subject to the actual service
0% VAT rate	Specified export goods and qualifying cross-border services or intangible assets	Zero-rating is different from exemption and normally requires evidence
3% collection rate	Simplified calculation where prescribed	Current relief can temporarily reduce qualifying small-scale sales to 1%

General taxpayer and small-scale taxpayer

A general VAT taxpayer calculates output VAT and, where conditions are satisfied, deducts eligible input VAT. A small-scale VAT taxpayer generally uses simplified calculation and does not deduct input VAT in the same way. The standard annual VAT-taxable sales threshold for small-scale status is RMB 5 million, although registration, election, and sector-specific issues should be confirmed for the particular entity.

For the period from January 1, 2026 through December 31, 2027, eligible small-scale taxpayers can use the following temporary measures:

• monthly VAT-taxable sales up to RMB 100,000 are exempt where the taxpayer uses a monthly period;
• quarterly VAT-taxable sales up to RMB 300,000 are exempt where the taxpayer uses a quarterly period; and
• sales otherwise subject to the 3% collection rate are generally reduced to 1%, unless the taxpayer elects to waive the reduction under the applicable rules.

The exemption threshold and the 1% treatment are separate measures. A small-scale taxpayer that issues a special VAT invoice for a transaction does not apply the threshold exemption to that invoiced transaction. If the 1% relief applies, it can issue the special invoice at 1%. If it voluntarily waives the reduction, it may issue at 3%. The customer should not pressure the supplier to print a rate that does not match the supplier’s lawful treatment.

Filing periods and due dates

General taxpayers commonly file VAT monthly. Eligible small-scale taxpayers commonly use quarterly periods. The assigned tax period should be checked in the electronic tax account because status and authority determinations matter.

For a one-month or one-quarter period, the return and payment are generally due within 15 days after the period ends. Public holidays can extend the filing calendar, so businesses should use the official annual tax calendar rather than a fixed recurring reminder alone. A zero-revenue month or quarter does not automatically remove a filing obligation.

3. Special VAT invoice vs general VAT invoice

The practical difference is not whether one looks more official. Both are regulated invoices. The main question is whether the document is a prescribed voucher for an input VAT credit and whether the buyer and transaction satisfy the substantive conditions.

Item	Special VAT invoice	General VAT invoice
Primary use	Supports output VAT reporting and can support the buyer’s input VAT credit	Supports transaction and accounting evidence but usually not an input VAT credit
Typical buyer	Business customer; input credit generally relevant to qualified general taxpayers	Businesses, consumers, or transactions where a special invoice is not required or permitted
Buyer information	Accurate legal name, taxpayer identification number, address and telephone, bank and account information where required by the form/system	Usually legal name and taxpayer identification number for a business buyer; system requirements vary by invoice type
VAT credit	Possible only if the voucher, transaction, use, timing, and confirmation requirements are satisfied	Usually no; limited statutory exceptions include prescribed documents for eligible tolls and domestic passenger transport
Correction	Fully digitalized versions use the red-letter process	Fully digitalized versions also use the red-letter process

A supplier should not issue a special VAT invoice to an individual consumer. Restrictions also apply to exempt transactions and specified retail consumer goods. Even where a special invoice is technically available, the parties should agree the invoice type and rate in the contract before payment.

A small-scale taxpayer can issue a special VAT invoice through the official system where permitted. That does not turn the supplier into a general taxpayer, and it does not give the buyer a credit beyond the VAT amount lawfully shown and otherwise eligible. The buyer still needs to complete any required use confirmation and ensure the purchase is used for creditable activities.

Before onboarding a supplier, collect and verify:

• the supplier’s registered legal name and taxpayer identification number;
• taxpayer status and the expected invoice type;
• the applicable rate or collection rate;
• your company’s exact invoice title, taxpayer number, address, telephone, bank, and account details where required;
• the goods or service description and any correct tax-classification code; and
• the timing of issuance, delivery channel, and correction process.

For a foreign-invested company still being established, this is one reason to sequence tax registration, bank activation, contracts, and supplier onboarding carefully. Our China company registration process guide explains the broader post-licence workstream.

4. Fully digitalized e-invoices: the 2026 operating model

China began pilots for fully digitalized e-invoices in selected regions in December 2021. Nationwide application began on December 1, 2024. The fully digitalized platform is now central to the China fapiao system, covering invoice issuance, delivery, use confirmation, correction, and tax data matching.

Official 2025 data reported by the tax authority showed approximately 19 billion fully digitalized invoices, representing about 91% of invoices issued. The invoiced amount exceeded RMB 440 trillion, around 98% of the total, and more than 99% of taxpayers were using the system. These figures describe adoption; they do not mean every historic paper document has disappeared.

Five operational features

1. No dedicated tax-control device for normal online issuance. Eligible taxpayers can use the electronic tax bureau and approved connections rather than purchasing traditional tax-control equipment.
2. Standard electronic formats. PDF or OFD is convenient for viewing, while the structured XML data should be retained as part of the compliant electronic accounting archive. Do not keep only a screenshot.
3. A 20-digit invoice number. The number supports standardized digital management and verification.
4. A total invoicing quota. The system manages a taxpayer’s total invoice amount dynamically. Available quota can be adjusted according to tax status, risk, filing, business activity, and authority review.
5. Network delivery and confirmation. Issuers and recipients can exchange invoices through the electronic tax system, email, QR code, or other supported channels, subject to the official workflow.

New taxpayers should plan for digital issuance from the start. Paper invoices are being phased down during 2026, but a business should follow the local tax bureau’s actual timetable rather than assume a single unsupported nationwide “paper ban” date.

Businesses generally access digital invoicing through the electronic tax bureau’s web interface, an approved API connection, or a Leqi digital-account connection used by qualifying platform or enterprise systems. The right option depends on invoice volume, internal controls, ERP integration, and taxpayer eligibility.

Corrections use red-letter invoices

A fully digitalized e-invoice generally cannot be voided after issuance. If goods are returned, a service is cancelled, a discount changes the taxable amount, or the original invoice contains an error, the seller normally initiates the red-letter confirmation process and issues a red-letter invoice. Depending on whether the buyer has confirmed use or claimed a credit, the buyer may need to confirm the request before the correction is completed.

The company should retain:

• the original invoice data and XML file;
• the contract, order, acceptance or delivery evidence;
• payment and refund evidence;
• the reason for correction and internal approval;
• buyer confirmation where required; and
• both the red-letter and replacement blue-letter invoice records.

Deleting a PDF from an inbox or editing an image does not correct tax records.

5. When can input VAT be credited?

For a general taxpayer, a special VAT invoice is necessary in many domestic purchases, but it is not sufficient by itself. A defensible input VAT credit normally requires all four of the following:

1. A real transaction. The goods, services, intangible assets, or property were actually acquired.
2. A prescribed and valid deduction voucher. This may be a special VAT invoice, customs import VAT payment certificate, tax-payment certificate, or another document specifically permitted by law.
3. Use in a creditable taxable activity. Input relating to non-creditable uses must be excluded or apportioned.
4. Required confirmation, filing, and records. The buyer must complete the applicable digital confirmation and report the credit correctly.

Input VAT may be non-creditable where it relates to simplified-tax items, VAT-exempt items, collective welfare, personal consumption, abnormal losses, or other statutory exclusions. For assets or services used partly in taxable and partly in non-creditable activities, a reasonable allocation can be required. The formula and adjustment period depend on the item and current rules.

For imported goods, the relevant input VAT voucher is normally the customs import VAT payment certificate, not the overseas seller’s commercial invoice. An overseas commercial invoice can still be important contract and accounting evidence, but it is not by itself a Chinese VAT deduction voucher. The corporate income tax treatment of the expense and the supporting documents required for that purpose are separate questions.

Hainan FTP exception: after the island-wide customs closure on December 18, 2025, eligible Hainan entities importing goods outside the import-tax catalogue are exempt from import-stage VAT and consumption tax — no import VAT is paid, so no customs payment certificate (and no import input VAT) arises; domestic-stage VAT on sales inside the island still applies in full. See Section 18.

When a company performs both taxable and exempt activities, it should configure accounts and project codes before costs are incurred. Trying to reconstruct use after a tax query is more difficult than recording the allocation contemporaneously.

For a broader view of recurring filings and provider scope, see our China bookkeeping cost guide and bookkeeping and tax service.

6. False fapiao and the legal consequences

Invoice risk is not limited to printing a counterfeit document. Prohibited conduct includes issuing an invoice for a transaction that did not occur, issuing a false invoice for oneself, asking another party to issue one falsely, or introducing others to false issuance. A real transaction can also create risk if the amount, goods, service, counterparty, or other essential invoice content is deliberately mismatched.

Risk area	Possible consequences	Key qualification
False special VAT invoice used to obtain a tax credit	Denied credit, back tax, late-payment surcharge, administrative penalty, tax-credit impact, and possible criminal liability	Criminal treatment depends on conduct, tax amount, knowledge, intent, and judicial thresholds; the highest sentence for the most serious cases can be life imprisonment
False ordinary invoice	Administrative and possible criminal consequences	Under the current judicial interpretation, “serious circumstances” include face value of RMB 500,000 or at least 100 invoices with aggregate face value of RMB 300,000; higher thresholds apply to “especially serious circumstances”
Buyer receives a problematic invoice	Credit or deduction adjustment, back tax, surcharge, penalty, and possible investigation	A buyer is not automatically guilty of the issuer’s offence; authorities examine whether the transaction was real and what the buyer knew, intended, and did
Bookkeeping or tax agent facilitates false issuance	Professional-services, administrative, civil, and possible criminal consequences	Companies should verify provider qualifications, scope, staff, controls, and records rather than hand over seals or credentials without supervision

Late tax payment can attract a daily surcharge of 0.05% of overdue tax. Evasion-related penalties can reach multiples of the underpaid tax where the statutory conditions are met. Serious invoice offences are also governed by the Criminal Law and the Supreme People’s Court and Supreme People’s Procuratorate’s judicial interpretation effective March 20, 2024.

Foreign managers sometimes hear that a document is safe because “the tax portal accepted it.” That is the wrong test. China’s tax administration increasingly compares invoice, contract, logistics or service evidence, payment, customs, payroll, and accounting data. Practitioners often call this wider data environment Golden Tax IV, but that phrase is industry shorthand rather than a substitute for the actual statutes, regulations, and tax-authority rules.

Use the four-flow principle as a practical control: the contract or order, physical or service delivery, fund flow, and invoice should tell a consistent commercial story. Exact one-to-one matching is not always possible—platform collections, authorized payment, netting, and group arrangements can be legitimate—but any difference should have a documented legal and commercial explanation.

Data matching continues to become more transaction-specific. For example, the nationwide transaction-to-invoice rules for refined-oil retail sales are scheduled to apply from November 1, 2026. The direction is clear: invoice data is being connected more closely with the underlying sale.

7. Ten practical controls for foreign businesses

1. Put invoice terms in the contract. State whether the price includes VAT, the required invoice type, the expected rate, timing, and the correction mechanism.
2. Verify counterparty registration data. Use the exact legal name and taxpayer identification number; do not invoice an English trade name that is not the registered title.
3. Confirm taxpayer status before pricing. A general taxpayer and a small-scale taxpayer can have different VAT mechanics and invoice capability.
4. Separate quotation from tax conclusion. Sales staff should not choose a tax rate without finance or tax review of the actual goods or service.
5. Control invoice credentials and company seals. Use named users, role-based access, approval thresholds, and prompt deactivation when staff leave.
6. Reconcile every filing period. Match sales, bank receipts, issued invoices, output VAT, purchases, confirmed input VAT, and ledger balances.
7. Archive source data, not only images. Keep XML and system records with contracts, orders, delivery or acceptance, payment, and approvals.
8. Review red-letter activity. Repeated cancellations, corrections, or unusual month-end spikes can signal process errors or misconduct.
9. Perform supplier risk checks. Investigate sudden bank-account changes, third-party payments, invoice descriptions unrelated to the supplier’s business, or requests to split transactions artificially.
10. Escalate before claiming. If the transaction or voucher is uncertain, suspend the credit, gather evidence, and seek transaction-specific advice before filing.

These controls fit naturally into the finance setup of a new WFOE. A founder planning broader operations can use our Doing Business in China guide to coordinate company, employment, banking, and tax workstreams, and our business bank account guide to plan payment evidence and bank controls.

8. Hainan companies: VAT still follows the national framework

A company registered in the Hainan Free Trade Port uses China’s national VAT framework. Hainan’s well-known 15% corporate income tax policy is a corporate income tax incentive for qualifying encouraged-industry enterprises with substantive operation; it does not reduce a 13%, 9%, or 6% VAT rate and does not change the evidence required for input VAT.

After company registration, a Hainan foreign-invested enterprise should complete tax information confirmation, establish taxpayer and invoice permissions, set up its digital invoicing quota, register invoice users, and align contracts and bank accounts before trading at scale. A new company’s initial total invoice quota may not match its expected turnover. If more capacity is needed, prepare contracts, purchase orders, bank evidence, business plans, customs or logistics records, and other materials the tax authority may request. Quota adjustment is an authority decision based on the taxpayer’s facts and risk profile.

For the income-tax policy boundary, see our China corporate income tax guide. For implementation support, review our bookkeeping and tax service or coordinate the entity setup through our company registration service.

9. A 30-day fapiao setup checklist

Before the first sale

• confirm VAT taxpayer status and filing period;
• map products and services to the correct VAT treatment;
• configure tax-inclusive and tax-exclusive pricing;
• agree invoice type and buyer-data fields in contract templates; and
• assign invoice users and approval limits.

Before the first purchase credit

• verify supplier identity and taxpayer status;
• collect contract, delivery or acceptance, and payment evidence;
• verify invoice code, content, amount, and rate;
• confirm qualifying use and any required apportionment; and
• complete use confirmation and book the transaction in the correct period.

At each month or quarter end

• reconcile the sales ledger to issued invoices and receipts;
• reconcile purchase records to confirmed input VAT;
• investigate red-letter invoices and unmatched documents;
• review digital invoice quota and filing notices; and
• retain the electronic accounting archive, including XML data.

10. Buying from China without a Chinese entity: what document should an overseas buyer ask for?

An overseas importer or buyer with no Chinese entity is not a Chinese VAT taxpayer and does not enter China’s domestic VAT credit chain. A Chinese supplier’s export sale normally follows the export exemption or export refund/exemption pathway. Under China invoice requirements, a supplier generally cannot name an overseas buyer without a Chinese taxpayer identification number as the purchaser on a VAT special invoice because a fapiao is a voucher inside China’s tax system.

What the buyer normally receives is a supplier-created commercial invoice or pro forma invoice, a packing list, and the export customs documents. Those records evidence the sale, shipment, customs clearance, and the buyer’s accounting outside China. Whether the buyer may book the cost or claim a tax credit in its home jurisdiction is a question under that jurisdiction’s rules and the particular transaction; a Chinese fapiao analysis does not answer it.

The document chain changes with the buying model:

1. Direct purchase from a Chinese supplier (including EXW or FOB). The overseas buyer receives the commercial and shipping documents. If import VAT is paid in China under an import arrangement, the relevant Chinese voucher is the customs import VAT payment certificate, and its named party and credit treatment follow the actual importer or Chinese import-agent structure.
2. Purchase through a China-based sourcing agent or trading company. The contract must show whether that intermediary acts only as agent or buys and resells. That distinction determines who contracts, pays, exports, and holds each fapiao and customs record. Our China sourcing agent guide maps the document flow under each model.
3. Purchase through your own WFOE or other Chinese entity. The Chinese entity returns to the special-versus-general invoice and input-credit rules in Sections 3 and 5, while its later export is a separate transaction.

An employer-of-record arrangement handles payroll, not invoicing — it does not give a foreign company the ability to issue Chinese fapiao. Before ordering, put the legal buyer, Incoterm, exporter of record, payment recipient, document list, and responsibility for customs evidence into the contract.

11. Booked, deductible, creditable: the three-layer fapiao test

Foreign managers often use “deductible” to mean three different results. Accounting entry, corporate income tax (CIT) pre-tax deduction, and VAT input credit are separate tests; passing one does not automatically pass the others.

Voucher you hold	Can it be booked (accounting entry)?	CIT pre-tax deduction?	VAT input credit?
Special VAT fapiao (compliant, real transaction)	Yes	Yes, if genuine, legal, and relevant	Yes, for a general taxpayer outside non-creditable items
General VAT fapiao	Yes	Yes, if compliant	Generally no
Receipt from a small sporadic individual sale within the threshold	Yes	Yes, with the prescribed supporting record	No
Overseas commercial invoice / customs payment certificate	Per transaction	CIT evidence is a separate question	Only the customs import VAT payment certificate supports import VAT
Internal voucher (payroll, depreciation, allocation sheet)	Yes	Yes for non-taxable items with supporting documents	No

Booked means that a lawful voucher and supporting evidence can substantiate an accounting entry. It does not decide the tax result. CIT pre-tax deduction asks whether the expenditure is genuine, lawful, and related to earning income under the supporting-voucher framework in STA Announcement No. 28 of 2018. A taxable purchase normally requires a compliant invoice, while non-taxable items can use prescribed internal or external records. VAT input credit is narrower: a general taxpayer needs a prescribed VAT deduction voucher, a real transaction, creditable use, and the required use confirmation and filing.

A general fapiao may therefore support booking and CIT deduction but no VAT credit. A special fapiao may still fail the VAT test if it covers a fictitious transaction or a non-creditable use. An internal payroll voucher may support accounting and CIT without being a VAT document at all. Turning these vouchers into monthly filings and the annual CIT reconciliation is a separate workflow; see our China bookkeeping guide.

12. The e-invoice total quota: four ways it changes and how to apply for more

Fully digitalized invoicing replaces the old practice of buying a fixed number of paper forms with a dynamically managed total invoicing quota. The available amount is not a permanent entitlement and can change as the tax system receives new filing, credit, risk, and operating information.

There are four practical adjustment routes:

1. Initial grant. A new taxpayer receives an opening quota based on registration data, industry, taxpayer profile, and available tax-credit information.
2. Monthly automatic adjustment. The system can increase or reduce capacity by reference to declarations, tax payment, tax-credit level, risk indicators, and operating data.
3. Temporary adjustment. A taxpayer facing a genuine large contract or seasonal sales peak can request temporary capacity for that business need.
4. Manual application. The taxpayer applies through the electronic tax bureau or digital tax account and submits evidence such as sales contracts, orders, bank records, transport or delivery documents, and other materials showing a real transaction. The competent tax authority decides the result.

Start the review before a large invoice is due. Compare the unused quota with the tax-inclusive value of signed orders, identify which legal entity will invoice, and keep the contract, payment, inventory, and delivery evidence consistent. If capacity is insufficient, do not split a transaction artificially, borrow another entity’s quota, or ask a third party to issue the invoice. Those steps create false-fapiao risk rather than solving a capacity problem.

Long periods of nil declarations, filing anomalies, abnormal-taxpayer status, or frequent red-letter corrections can affect risk assessment, tax credit, and available quota. Correct the underlying declaration or registration issue and give the authority transaction evidence instead of treating quota as a sales-team setting.

13. Red-letter invoices and voiding: who does what, and when

A fully digitalized e-invoice cannot normally be voided after issuance. An invoicing error, return, service cancellation, discount, or change in taxable amount is corrected through a red-letter invoice, often called hongchong. The former paper-invoice idea of voiding a current-month form after collecting every copy does not apply to a digital invoice.

The national transition now has four relevant milestones: pilots began in selected regions in 2021; nationwide application began in December 2024; paper VAT special invoices stopped being used nationwide from July 1, 2026; and from August 1, 2026, fully digitalized e-invoices became the comprehensive operating form, with paper invoices no longer printed or collected. In this model, red-letter issuance is the correction route.

The parties act according to the invoice’s use status:

1. The buyer has not completed use confirmation and has not filed or credited the input VAT. The seller can initiate red-letter issuance in the electronic tax bureau or digital tax account; the buyer normally takes no system action.
2. The buyer has confirmed use or has already filed and credited the input VAT. Either party initiates the red-letter confirmation sheet, but the buyer must confirm it in the digital tax account before the seller issues the red-letter invoice.
3. The buyer already credited the input VAT. It must transfer out the input VAT in the current VAT period. The credit cannot remain after the underlying invoice is reversed, and frequent large red-letter issuances may trigger tax-bureau risk review.
4. The correction crosses accounting periods. The same red-letter path applies, and the accounting entry is recorded in the period when the red-letter invoice is issued. Retain the confirmation record, original invoice XML, business explanation, and replacement record.

Specific screen labels can change as the electronic tax bureau is updated; follow the current system workflow rather than an old menu screenshot.

14. A 3-minute fapiao verification checklist for buyers

Verification and use confirmation are different actions. Verification asks whether an invoice is authentic and what issuance status the tax system records. Use confirmation assigns a received voucher to credit, booking, or another permitted use in the digital tax account; it is part of the buyer’s monthly tax workflow.

Use the official National VAT Invoice Verification Platform. Enter the invoice number, issue date, amount, and other requested fields; a fully digitalized invoice uses a 20-digit number. The company’s digital tax account also displays the fully digitalized invoices received by that taxpayer.

Run this short check before confirmation:

1. Match the buyer’s legal name and unified social credit code to the company record. One wrong character can prevent valid use.
2. Match the goods or service description, quantity, unit price, amount, and tax rate to the contract and delivery or acceptance record.
3. Verify the invoice on inv-veri.chinatax.gov.cn and check its issuance status and any red-letter record.
4. Confirm that the seller’s legal name is the contract party and payment recipient. A third-party invoice or personal payment account is a warning sign.
5. Treat a successful system match as necessary, not sufficient. A genuine invoice number attached to a fictitious transaction still creates false-fapiao risk, so retain contract, delivery or logistics, and payment evidence.
6. For a digital invoice, archive the XML file with its digital signature rather than only a PDF printout; see Section 17.

Assign the check to a named employee or bookkeeping provider and record exceptions before claiming the credit. A verification screenshot alone does not prove the business substance.

15. Expenses without a fapiao: small sporadic purchases, missing invoices and the annual reconciliation deadline

An expense without a standard supplier fapiao is not automatically deductible, and a supplier’s refusal is not automatically lawful. First identify who supplied the item, whether the supply is taxable, and why a prescribed voucher is unavailable.

For an individual who is not required to complete tax registration and conducts a small sporadic business transaction, the standard follows the VAT threshold. Since January 1, 2026, that threshold is RMB 1,000 per occurrence/day, raised from RMB 500; multiple transactions in one day are combined. A tax-office-issued fapiao, or a payment receipt plus internal records, can serve as the CIT pre-tax deduction voucher. The receipt should state the recipient’s or individual’s name and identification number, the item, amount, and other prescribed information.

A registered taxpayer selling goods or services normally has an invoice obligation and the buyer may request the invoice. If a registered supplier refuses, distinguish a lawful limitation on a particular invoice type from tax avoidance. The buyer can use the 12366 channel or electronic tax bureau complaint route and should preserve the contract, payment request, delivery evidence, and communications.

Obtain or replace the compliant invoice before the annual CIT reconciliation, normally due by May 31 of the following year. If the counterparty has been deregistered, revoked, or classified as an abnormal taxpayer and a replacement is impossible, the supporting-voucher rules provide a documentary route. Keep: (1) proof that reissuance is impossible; (2) the contract or agreement; (3) non-cash payment proof; (4) transport evidence; and (5) warehouse in/out records and accounting records. Without a replacement or the required evidence by the deadline, make a full tax adjustment and do not deduct the expenditure.

Payroll, social insurance, compensation, depreciation, and other non-VAT-taxable internal items do not require a supplier fapiao merely because they are expenses; use the prescribed internal vouchers and supporting records. The analysis must follow the transaction, not a blanket “no fapiao” rule.

16. Buyer due diligence: avoiding a false-fapiao chain and the “bona fide acquisition” route

A seller’s invoice offence does not automatically make the buyer guilty of the same offence. The authority examines whether the underlying transaction was real, and whether the buyer knew or should have known about the problem. Under the bona fide acquisition route, a buyer that genuinely acquired goods or services without knowledge of the false special invoice is not treated as committing tax evasion or fraudulent credit; however, the input VAT already credited must be recovered or transferred out. If the buyer later obtains a compliant special invoice, a credit may again be available under the applicable rules.

Build the evidence before the first special-fapiao purchase:

1. Verify the supplier on the National Enterprise Credit Information Publicity System at gsxt.gov.cn: legal name, legal representative, registration status, and whether it is deregistered or abnormal.
2. Verify taxpayer status and general-taxpayer qualification through electronic tax-bureau channels before the first special-invoice transaction.
3. Keep the contract party, invoicing party, payee, and shipper aligned. Reject unexplained third-party invoicing or payment to a personal account.
4. Escalate first-order warning signs: a price far below market, pressure to pay before contracting, invoice content unrelated to the supplier’s registered business, artificial order splitting, or a sudden payment-account change.
5. Retain the complete evidence file: contract, purchase order, delivery or logistics records, warehouse records, bank slips, acceptance evidence, and invoice XML. That file supports bona fides if the supplier is later investigated.

Due diligence is not a one-time screenshot. Recheck changed bank details, ownership, status, and invoicing behaviour, and pause the VAT credit when the commercial story and the four flows no longer match.

17. How long to keep fapiao and accounting records: ending the 5/10/30-year confusion

The competing five-, ten-, and thirty-year answers usually mix two legal record systems. Accounting-archive and tax-record rules operate in parallel, so apply the longer period when the same document belongs to both.

Record type	Retention period	Basis
Original vouchers (including fapiao data), bookkeeping vouchers, general and subsidiary journals	30 years	Accounting Archives Management Measures (MOF/State Archives Administration Order No. 79)
Monthly/quarterly financial reports, bank statements, tax returns	10 years	Same Measures
Annual financial reports, archives custody and destruction registers	Permanent	Same Measures
All tax-related materials (books, vouchers, reports, tax-paid certificates, invoices, export documents)	Minimum 10 years	Tax Collection Law Implementing Rules, Article 29
When the two systems overlap	Follow the longer period; for example, keep fapiao and accounting vouchers for 30 years	Both systems

For a fully digitalized invoice, the legally valid archived original is the XML file containing the digital signature. OFD supports reading and verification, while PDF is a preview. Keeping only a PDF printout and discarding the XML does not create a valid electronic archive for a tax inspection. Proper electronic accounting archives have the same effect as paper archives when the applicable controls are satisfied.

Hainan’s substantive-operation rules also require accounting vouchers, books, and financial reports to be kept within the Free Trade Port, while compliant electronic archives can remain remotely accessible. See our guide to substantive operation rules when designing document custody and access.

Create a retention schedule by record type, preserve source formats and signatures, control deletion rights, and document any lawful destruction. A cloud folder full of PDFs is not a retention policy.

18. Hainan FTP after the island-wide customs closure: fapiao and VAT in practice

Hainan’s island-wide customs closure began on December 18, 2025, under the operating structure of a more open first line, a controlled second line, and freer circulation within the island. The closure changed import-tax mechanics; it did not abolish China’s domestic VAT system or the duty to issue fapiao.

Scenario	Import and domestic-tax result	Invoice consequence
Eligible entity imports a good outside the import-tax catalogue through the first line	Import duty, import-stage VAT, and consumption tax are exempt. The negative-list policy covers 6,637 tariff lines, about 74% of all lines; about 26% remain taxed	No import VAT is paid, so no customs import VAT payment certificate and no import input VAT arise
Zero-tariff goods are sold or used in a taxable supply inside Hainan	Domestic-stage VAT and consumption tax still apply under the national rules	The Hainan seller still issues a fully digitalized fapiao and records output VAT
Goods circulate between eligible entities or move to a non-eligible party / mainland	Eligible circulation can avoid repayment of the import taxes, but domestic VAT still applies; a transfer through the second line or to a non-eligible party follows the required import procedures and tax settlement	The domestic invoice chain continues and the customs record must match the actual route
Encouraged-industry goods with at least 30% processing value added move through the second line	Import duty may be exempt, but domestic-stage VAT and consumption tax remain payable	Do not treat the 30% rule as a VAT exemption

The practical difference is the input structure. A mainland importer that pays import VAT may hold a customs payment certificate for credit. An eligible Hainan importer under the zero-tariff first-line policy pays no import-stage VAT, so it has no corresponding import input credit. Its credit pool instead comes mainly from qualifying island purchases, services, and operating expenses, while its island sales still produce output VAT. Pricing and cash-flow models must reflect that asymmetry. The Hainan zero-tariff policy guide explains eligible entities and the catalogue boundary.

For second-line sales, transfers to non-eligible parties, and the processing route, map ownership, customs status, invoice issuance, and payment before the goods move. Our import/export and 30% value-added rule guide covers that route, while the Hainan Free Trade Port guide provides the closure framework.

The proposed sales tax is not yet in force. As of September 2026 it remains under study, has not been introduced, and has not been implemented. Hainan businesses continue to declare and pay VAT under the national system; statements that the island has already replaced VAT with sales tax are wrong.

Hainan’s 15% corporate income tax rate is also separate: it applies only to encouraged-industry enterprises with substantive operation in the FTP. It is not a VAT concession. Build the invoice process around the rules currently in force, not around a planned tax simplification.

FAQ: fapiao questions foreign businesses ask most

What is a fapiao in China?

A fapiao is an invoice administered under China's tax rules and issued through the official invoicing system. It is a statutory tax voucher, not merely a seller-created commercial invoice or payment receipt. Its type and content can affect VAT reporting, input VAT credits, expense evidence, and the buyer's accounting records.

What is the difference between a special VAT invoice and a general VAT invoice?

A qualified general VAT taxpayer can normally use a compliant special VAT invoice to support an input VAT credit, subject to the underlying transaction and other conditions. A general VAT invoice usually does not support an input VAT credit, although limited statutory documents for items such as eligible tolls and domestic passenger transport can be treated differently.

What are China's VAT rates in 2026?

The Value-Added Tax Law effective January 1, 2026 provides main rates of 13%, 9%, and 6%, with a 0% rate for specified cross-border supplies. A 3% collection rate applies to simplified calculation unless a current relief measure provides otherwise. The correct rate depends on the transaction, taxpayer status, and applicable rules.

Can a small-scale VAT taxpayer issue a special VAT invoice?

Yes. A small-scale taxpayer can issue a special VAT invoice through the official system where permitted, but the invoiced transaction is not covered by the small-business VAT threshold exemption. Where the temporary 1% collection-rate relief applies, the invoice can be issued at 1%; a taxpayer that waives that reduction may issue at 3%, subject to the current rules.

Are fully digitalized e-invoices legally valid in China?

Yes. China's Value-Added Tax Law states that electronic and paper VAT special invoices have equal legal effect, and the nationwide fully digitalized e-invoice system has applied since December 1, 2024. Businesses still need compliant download, delivery, use-confirmation, and accounting-archive procedures.

Can a fully digitalized e-invoice be voided?

A fully digitalized e-invoice generally cannot be voided after issuance. If a sale is returned, an invoicing error is found, a service is cancelled, or the taxable amount changes, the correction normally uses the red-letter invoice process. Buyer confirmation may be required depending on invoice use and status.

Can an overseas commercial invoice support an input VAT credit in China?

An overseas commercial invoice is not, by itself, a Chinese input VAT credit voucher. Import VAT is generally supported by the customs import VAT payment certificate, while cross-border services and other transactions follow their own tax and documentation rules. Corporate income tax deductibility and accounting evidence are separate questions.

What happens if a company receives a false fapiao?

The result depends on the facts, including whether the transaction was real, whether the buyer knew or should have known of the problem, and whether the invoice was used for an input VAT credit or tax deduction. Possible consequences include denied credits or deductions, back tax, late-payment surcharges, administrative penalties, tax-credit effects, and criminal exposure in serious cases.

Can a foreign company without a Chinese entity get a fapiao from a Chinese supplier?

Usually not in the VAT-invoice sense: a fapiao is a voucher inside China's VAT system, and a supplier selling for export generally cannot issue a VAT special invoice to an overseas buyer that has no Chinese taxpayer identification. Export sales normally follow the export exemption or refund pathway, and the overseas buyer receives the supplier's commercial invoice, packing list and customs documents instead. Whether those documents are valid expense evidence in your home country is a question under your local tax rules, not China's. If you buy through a China-based sourcing agent or trading company, or once you set up your own Chinese entity, the invoice chain changes — see the sections above and our sourcing and company-setup guides.

How long do I need to keep fapiao and accounting records in China?

Two retention systems apply in parallel, and you follow the longer period. Under the Accounting Archives Management Measures, original vouchers (including fapiao data), bookkeeping vouchers and general/subsidiary journals are kept for 30 years; monthly and quarterly financial reports, bank statements and tax returns for 10 years; and annual financial reports permanently. Separately, the Tax Collection Law Implementing Rules require all tax-related materials — books, vouchers, reports, tax-paid certificates and invoices — to be kept for at least 10 years. In practice this means fapiao and accounting vouchers are retained for 30 years. For fully digitalized e-invoices, the legally valid original is the XML file with its digital signature; keeping only a PDF printout is not accepted as a valid archive in a tax inspection.

Official and primary references

• Value-Added Tax Law of the People’s Republic of China — State Taxation Administration
• Announcement of the Ministry of Finance and the State Taxation Administration on the Connection of VAT Preferential Policies after the Implementation of the Value-Added Tax Law, Announcement No. 10 of 2026 (MOF/STA)
• STA Announcement No. 4 of 2026 (collection and administration of the VAT threshold and related matters; it cites Announcement No. 10 of 2026)
• Nationwide application of fully digitalized e-invoices from December 1, 2024 — State Taxation Administration
• More than 99% of taxpayers use fully digitalized invoices — State Taxation Administration
• Electronic accounting voucher data standards — Ministry of Finance
• Judicial interpretation on criminal tax offences — Supreme People’s Court
• Transaction-to-invoice rules for refined-oil retail sales — State Taxation Administration
• National VAT Invoice Verification Platform — State Taxation Administration
• Accounting Archives Management Measures — Ministry of Finance and State Archives Administration Order No. 79
• Hainan FTP import tax policy — Cai Guan Shui [2025] No. 12

Last reviewed: August 31, 2026. Tax rules, local implementation, and invoice-system procedures can change. Obtain current, transaction-specific advice before relying on a particular VAT or invoice treatment.