Summary of VAT Tax Obligation Timing (2026 Latest Edition)

📌 Note: The VAT tax obligation timing referred to in this article means the time points at which taxpayers shall bear tax obligations as stipulated in the “VAT Law of the People’s Republic of China” (hereinafter “VAT Law”) and its implementing regulations. All rules below are based on the latest VAT-related policies effective from January 1, 2026.

I. Goods Sales (Including Deemed Taxable Transactions)

1.1 General Goods Sales

(1) Direct Payment Method

Per Article 28, Paragraph 1, Item 1 of the VAT Law, for taxable transactions, the tax obligation timing is the date of receiving sales payments or obtaining evidence of the right to collect sales payments; if an invoice is issued first, it is the date of invoice issuance.

Per Article 39 of the VAT Law Implementing Regulations:

Judgment logic: Invoice issuance date → Payment receipt date → Contract-specified payment date → Goods dispatch date — whichever is earliest.

(2) Advance Payment Method

For sales of general goods using advance payment, different scenarios apply:

⚠️ Note: Even if the contract-specified payment date is earlier than the goods dispatch date, that payment date still creates a tax obligation, as it satisfies the “obtaining evidence of the right to collect” condition.

Special Rule — Large Equipment: For large machinery, equipment, ships, aircraft, etc. with production periods exceeding 12 months, per Article 4(1) of the “Announcement of the Ministry of Finance and the State Administration of Taxation on VAT-Related Policies” (Announcement 2026 No. 13), the tax obligation timing is the date of receiving payments or the payment date specified in written contracts (whichever is earlier).

1.2 Deemed Taxable Transactions (Goods)

Per Article 28, Paragraph 1, Item 2 of the VAT Law, for deemed taxable transactions, the tax obligation timing is the date of completing the deemed taxable transaction.

Per Article 40 of the VAT Law Implementing Regulations, this “completion date” specifically refers to the date of goods dispatch. For other types of subject matter such as intangible assets and real property, the completion timing is determined accordingly.

📝 Policy change: The VAT Law changed the original “deemed sales” to “deemed taxable transactions,” unifying the taxation logic for goods, services, intangible assets, real property, and financial products.

1.3 VAT Withholding

The VAT withholding obligation timing is the date when the taxpayer’s VAT obligation arises.

II. Service Sales

2.1 General Services (Including Financial, Lifestyle, Modern Services, etc.)

(1) Standard Scenarios

Per Article 28, Paragraph 1, Item 1 of the VAT Law, the tax obligation timing is the date of receiving sales payments or obtaining evidence of the right to collect sales payments; if an invoice is issued first, it is the date of invoice issuance.

The date of obtaining evidence of the right to collect refers to the payment date specified in written contracts; if no written contract is signed or no payment date is specified, it refers to the date of transaction completion, i.e., the date of service completion.

(2) Advance Payment Followed by Installment or Multiple Service Deliveries

Per Article 4(2) of Announcement 2026 No. 13:

• The tax obligation timing is determined by the earlier of the actual start date of first service and the contract-specified first service start date
• Taxpayers shall declare and pay VAT on the full amount received at once

Example: A property company collects annual property fees in advance. If the contract specifies service starting from January, the tax obligation timing is January (or the actual first service date, whichever is earlier), and VAT must be declared on the full property fee amount. If an invoice is issued first, the tax obligation timing is the invoice issuance date.

2.2 Financial Loan Services

Per Article 4(4) of Announcement 2026 No. 13:

📌 Financial institutions refer to banks, credit unions, finance companies, trust companies, securities companies, insurance companies, financial leasing companies, securities fund management companies, and other financial institutions approved by the PBOC, NFRA, or CSRC to conduct financial and insurance business.

2.3 Construction Services

(1) Tax Obligation Timing

Per Article 28, Paragraph 1, Item 1 of the VAT Law, the tax obligation timing for construction services is the date of receiving sales payments or obtaining evidence of the right to collect sales payments; if an invoice is issued first, it is the date of invoice issuance. If no written contract is signed or no payment date is specified, it is the date of construction service completion.

(2) Advance Payment Prepayment Rules

Per the “Measures for VAT Prepayment Management” (Announcement 2026 No. 14), construction services involve two independent prepayment scenarios:

🔑 Key point: The two scenarios have different determination logic —

• Scenario 1 uses “whether cross-regional” as the standard, covering all payment types
• Scenario 2 uses “whether payment is advance in nature” as the standard, applying only to advance payments received before construction

Prepayment calculation: Based on the balance of advance payments received minus subcontracting payments paid; if the balance is negative, it may be carried forward to the next period.

Prepayable tax = (Advance payments received - Subcontracting payments paid) ÷ (1 + Applicable tax rate or levy rate) × Pre-levy rate

⚠️ Important reminder: VAT prepayment does not equal tax obligation arising! Tax obligation timing is still determined per the rules in (1) above.

2.4 Leasing Services

(1) Advance Payment Method

Per Article 4(2) of Announcement 2026 No. 13, for advance payment followed by installment or multiple service deliveries, the tax obligation timing is determined by the earlier of the actual first service start date and the contract-specified date. Leasing services follow this rule.

(2) Non-Advance Payment Method

Per Article 28, Paragraph 1, Item 1 of the VAT Law: whichever is earliest among payment receipt date, evidence of right to collect date, and invoice issuance date.

III. Real Property / Intangible Asset Transfers

3.1 Real Property Sales

Per Article 39 of the VAT Law Implementing Regulations, if no written contract is signed or no payment date is specified, the transaction completion date is the date of real property transfer completion.

Per Article 4(3) of Announcement 2026 No. 13, specific determination rules for real property transfer completion:

Payment received but not delivered or registered: If the taxpayer receives payment but hasn’t completed ownership registration or actual delivery, the tax obligation timing is still determined by the general rules in Article 28, Paragraph 1, Item 1 — whichever is earliest among invoice issuance date, payment receipt date, and evidence of right to collect date (contract-specified payment date).

3.2 Intangible Asset Transfers

Per Article 28, Paragraph 1, Item 1 of the VAT Law, the tax obligation timing for intangible asset transfers is whichever is earliest among invoice issuance date, payment receipt date, and evidence of right to collect date.

If no written contract is signed or no payment date is specified, per Article 39 of the VAT Law Implementing Regulations, it is the date of intangible asset transfer completion.

IV. Import and Export of Goods

4.1 Imported Goods

Per Article 28, Paragraph 1, Item 3 of the VAT Law, the tax obligation timing for imported goods is the date of customs declaration for import.

📝 Example: Goods arrive at port on February 2, 2026, and customs declaration for import is made on February 4, 2026. The tax obligation timing is February 4.

4.2 Exported Goods

Per Article 41 of the VAT Law Implementing Regulations, if the customs export declaration date is earlier than the tax obligation timing under Article 28, Paragraph 1, Items 1 and 2 of the VAT Law, the tax obligation timing is the date of customs export declaration.

That is, for export tax refund situations, if the export customs declaration time is earlier than the normal tax obligation timing, the customs export declaration date applies.

Appendix: Main Policy References

⚠️ Disclaimer: My capabilities are limited and I cannot guarantee the above content is completely correct or comprehensive. Please point out any errors for timely correction. This article is for reference only and does not constitute professional tax advice. For specific operations, please refer to the latest official documents from the State Administration of Taxation.