📅 Reporting Period
September 1, 2026 — September 30, 2026
I. Key Policy Updates This Month
1.1 New VAT Non-Taxable Transaction Rules Take Effect (6 Green, 4 Red)
Date: September 1, 2026 Source: Ministry of Finance & STA Announcement No. 25 of 2026
Effective September 1, 2026, the “Announcement on Clarifying VAT Matters for Non-Taxable Transactions” officially takes effect, using a “positive list + negative-list” approach to draw the line on input tax deductions for non-taxable transactions, and clearing up a grey area left by the VAT Law Implementation Regulations.
Key Changes:
✅ 6 Types of Non-Taxable Transactions Allowing Deduction (Positive List):
| No. | Scenario | Description |
|---|---|---|
| 1 | Insurance claim payments | Input tax on insurance claims received as the insured is deductible |
| 2 | Accepting donations | Input tax on monetary or non-monetary asset donations is deductible |
| 3 | Contract penalty | Input tax on penalties for unperformed contracts without taxable transactions is deductible |
| 4 | Free services provided | Excluding free transfers of financial products |
| 5 | Transfer of receivables | Transfer of receivables related to own taxable transactions (excluding securities) |
| 6 | Unlinked fiscal subsidies | Subsidies not directly linked to sales of goods/services volume or quantity |
❌ 4 Types of Non-Taxable Transactions Not Allowing Deduction (Negative List):
| No. | Scenario | Description |
|---|---|---|
| 1 | No taxable transaction within China | Not a domestic taxable transaction under Article 4 of the VAT Law |
| 2 | Paid equity transfer | Input tax on equity transfers (excluding securities) is not deductible |
| 3 | Dividends and bonuses | Input tax on dividends/bonuses from holding equity (including common shares of joint-stock companies) is not deductible |
| 4 | Commodity futures trading | Commodity futures trading excluding physical delivery |
Practical Recommendations:
- Self-inspect input tax deduction status for equity transfers, dividends, commodity futures, and other transactions that occurred during January–August 2026 but remain unprocessed; adjust per new rules
- For new transactions after September, determine input tax deductibility at the time of occurrence based on positive/negative lists
- Waiver of tax exemption is no longer subject to a 36-month lock-in period; changed to written declaration + filing system — enterprises may re-apply for exemption
- In discount sales, the price and discount amount must be separately stated in the “amount” column of the same invoice; noting discounts only in the remarks column is not recognized
1.2 Tax Exemption for Foreign Individuals’ Dividends and Bonuses Abolished
Date: September 1, 2026 Source: Ministry of Finance & STA Announcement No. 27 of 2026
The 32-year-old policy of “temporarily exempting foreign individuals from IIT on dividends and bonuses received from foreign-invested enterprises” has been officially abolished. From September 1, 2026, foreign individuals receiving dividends and bonuses from foreign-invested enterprises are subject to IIT as “interest, dividends, and bonuses” at a 20% rate.
Key Changes:
- Abolishes Item 8, Paragraph 2 of Caishui Zi [1994] No. 20
- Puts domestic and foreign individuals under the same IIT rules for dividends and bonuses
- Applicability determined by actual payment date: dividends paid before August 31 remain exempt; those paid after September 1 are subject to withholding
- Foreign-invested enterprises fulfill withholding obligations, filing within 15 days of the month following payment
Self-Inspection Checklist for Foreign-Invested Enterprises:
- ✅ Verify shareholder register, confirming identity of foreign individual shareholders
- ✅ Review dividend arrangements, distinguishing between resolution date and actual payment date
- ✅ For existing dividends resolved before September but not yet paid, confirm the treatment with the local tax authority
- ✅ Remind eligible foreign shareholders to prepare tax residency certificates and other documents to apply for lower treaty rates
- ✅ Withhold tax at time of payment; file within 15 days of the following month
1.3 Urban Land Use Tax Policy Adjustment for Energy and Resource Industries
Date: September 1, 2026 Source: Ministry of Finance & STA Announcement No. 22 of 2026
The nearly 40-year-old tax exemption for mining and coal production land ends, with a transition period established.
Key Changes:
| Period | Policy |
|---|---|
| Sep 1, 2026 — Aug 31, 2027 | Transition period: 50% reduction of taxable amount |
| From Sep 1, 2027 | Full collection resumes |
Affected Industries: Coal mining, oil & gas, hydropower/thermal power, building materials mining enterprises
Exemptions Retained: Land for explosives storage safety zones, dedicated railway/highway lines outside factory areas, etc. continue to be exempt.
Practical Recommendations:
- Eligible energy and resource enterprises should verify land ownership and land-use nature
- When filing on the electronic tax platform, enter the corresponding reduction/exemption code to enjoy the 50% reduction
1.4 Battery Consumption Tax Policy Adjustment
Date: September 1, 2026 Source: Ministry of Finance, GAC & STA Announcement No. 20 of 2026
The battery consumption tax has been reworked to encourage newer battery technology.
Key Changes:
| Battery Type | Sep 1, 2026 — Aug 31, 2027 | From Sep 1, 2027 |
|---|---|---|
| Mercury-free primary batteries | 2% | 4% |
| Metal oxide nickel batteries (NiMH) | 2% | 4% |
| Lithium primary & lithium-ion batteries | 2% | 4% |
| Vanadium redox flow batteries | 2% | 4% |
| Sodium-ion, solid-state, fuel cells | Exempt (through end of 2028) | Exempt (through end of 2028) |
| Perovskite, tandem, GaAs batteries | Exempt (through end of 2028) | Exempt (through end of 2028) |
Invoicing Requirement: When selling batteries, the tax classification code must be selected from the “battery” category.
1.5 Departure Tax Refund “Buy-and-Refund-Immediately” Goes Nationwide
Date: September 1, 2026 Source: STA, Shui Zong Huo Lao Fa [2026] No. 37
The new policy for nationwide processing of departure tax refunds under the “buy-and-refund-immediately” model officially takes effect, breaking the traditional territorial restrictions on tax refunds.
Key Changes:
- Tax refund shops upload the overseas traveler’s valid ID to complete cross-border tax refund material review online
- Self-service terminals enable fully paperless processing, with completion in as little as 2 minutes
- Supports refund transfers to digital RMB hard wallets, domestic/overseas bank cards, and third-party payment wallets
Enterprise Impact: Enterprises engaged in cross-border retail should confirm whether departure tax refund business requires adjustments linked to export tax refund declarations; recommend incorporating refund receipt accounting into self-inspection checklists.
1.6 “Spring Breeze” 16 Convenience Measures Fully Implemented
Source: State Taxation Administration
Covering smart tax services, tax credit repair, cross-department coordination, social insurance payment guidance, and more.
Key Measures:
- Smart Tax Services Upgrade: Some regions pilot AI-powered tax service assistants, achieving an 89% first-contact resolution rate
- Tax Credit Repair: Supports taxpayers in proactively correcting past compliance failures and repairing tax credit; Q4 is the best time to file for credit repair
- Tax Service Professional Credit Evaluation: TSC Level 5 is the highest credit rating, enjoying green channel and other incentives
1.7 New Rules for Domestic Entities Withholding Natural Person VAT
Effective: November 1, 2026 Source: Ministry of Finance & STA Announcement No. 28 of 2026
From November, enterprises purchasing R&D, design, consulting, software, film/TV production, and other services from natural persons have an obligation to withhold and remit VAT on behalf of the natural person.
Enterprise Preparation:
- Establish a withholding ledger
- Prepare for VAT deduction at filing time
- Monitor transitional arrangements
1.8 IIT Collection Rules Clarified for Restricted Share Transfers by Listed Companies
Source: Ministry of Finance, STA & CSRC Announcement No. 26 of 2026
Unified standards for the scope of restricted shares, income calculation, and withholding/filing procedures. Enterprises involving equity incentives, pre-IPO holdings, and private placement unlock transfers should pay close attention.
II. Invoice Management Focus
2.1 Discount Sales Invoicing Requirements Clarified
Announcement No. 25 reiterates: the price and discount amount must be separately stated in the “amount” column of the same invoice to calculate tax based on the discounted amount. Noting discounts only in the remarks column is not recognized by tax authorities.
2.2 Fully Digital Invoice Accounting and Archiving Reminders
| Operation | Notes |
|---|---|
| Issuance | Confirm buyer information is accurate |
| Red Flush | Must state the reason; frequent red flushes will be flagged |
| Cancellation | Fully digital invoices cannot be directly cancelled; only red flush is allowed |
| Accounting | Retain XML source files; saving only PDF/images does not meet requirements |
III. Social Insurance and IIT Updates
3.1 New IIT Rules for Foreign Individuals’ Dividends and Bonuses (Key Focus)
Foreign individuals receiving dividends and bonuses from foreign-invested enterprises:
- Rate: 20% (taxed separately as “interest, dividends, and bonuses”)
- Withholding: Foreign-invested enterprises withhold and file within 15 days of the following month
- Self-filing: If the enterprise fails to withhold, the foreign individual must pay before June 30 of the following year
- Tax Treaty: Eligible individuals may apply for lower treaty rates
3.2 IIT Halving for Individual Businesses Continues
Extended through December 31, 2027:
- Annual taxable income up to 2 million yuan: 50% reduction in IIT
- Can be combined with other preferential policies for disabled persons, veterans, etc.
3.3 Annual One-Time Bonus Taxation
Annual one-time bonuses can choose one of two methods: separate taxation / combined with comprehensive income. Taxpayers may choose the more favorable option.
IV. October Filing Deadline Reminders
| Tax Type | Filing Deadline | Notes |
|---|---|---|
| VAT (September period) | Before October 15 | Extended if holiday falls on deadline |
| Corporate Income Tax (Q3 prepayment) | Before October 15 | Quarterly filing |
| Individual Income Tax (September) | Before October 15 | Withholding (including first filing for foreign shareholders’ dividends) |
| Stamp Duty | Quarterly/per transaction | Based on assessed method |
| Surtaxes | Filed concurrently with VAT | — |
⚠️ Specific filing deadlines are subject to local tax authority announcements; deadlines are extended when they fall on statutory holidays. October 1–8 is the National Day holiday — please plan filing accordingly.
V. Industry Hot Topics This Month
5.1 Golden Tax Phase IV Data Penetration Continues to Upgrade
With several departments cross-checking the same data, tax supervision has shifted from “post-event inspection” toward early warnings and help along the way.
Key Comparison Dimensions in September:
| Dimension | Data Source | Alert Scenarios |
|---|---|---|
| Fund flows | People’s Bank of China | Abnormal large-value fund flows |
| Invoice flows | Tax authorities | Input/output mismatch |
| Social insurance flows | Social insurance departments | Discrepancy between social insurance base and declared wages |
| Business registration flows | SAMR | Asymmetry in enterprise registration/changes |
| Substantive operations | Multiple departments | Cross-verification of social insurance, utilities, leases for enterprises enjoying regional incentives (e.g., Qianhai) |
5.2 Qianhai Corporate Income Tax Incentive Filing
September is the critical period for the second batch of Qianhai 15% CIT incentive filings (closed September 18). Two hard requirements:
- Industry Classification: Main business must be in the incentive catalog, with main business revenue exceeding 60%
- Substantive Operations: On-staff employees, genuine business, social insurance contributions, lease contracts
Enterprises that missed the second batch should prepare materials in Q4 for the 2027 tax year.
5.3 New IIT Rules for Livestreamers/Creators (Effective October 1)
Platforms such as Douyin adjust the tax timing for streamers from October 1: tax obligations arise when income reaches a withdrawable balance, even if not withdrawn. All taxed as labor remuneration at 3%–45% progressive rates.
VI. Lifecycle Perspective: This Month’s Policies in Context
📌 This month’s updates belong to: Enterprise Lifecycle · Front-end (Daily Operations Stage)
September policies primarily focus on daily operations compliance:
- New VAT non-taxable transaction rules → Front-end input tax deduction decisions
- Foreign shareholder dividend IIT → Front-end profit distribution compliance
- Battery consumption tax adjustment → Front-end invoicing and tax calculation
- Land use tax transition → Front-end tax cost changes
- 16 convenience measures → Front-end filing efficiency improvement
- Credit repair mechanism → Front-end proactive compliance correction
Remember: Good front-end compliance means smooth mid-stage annual settlement and worry-free back-end deregistration.
📅 Next Month Preview
The October report will focus on:
- Key points for quarterly corporate income tax prepayment
- Practical preparation for natural person VAT withholding (effective November 1)
- Tracking the first filing for foreign individuals’ dividend IIT
- Q4 tax incentives and year-end planning window
- Impact of new IIT rules for livestreamers/creators
🔗 Related Overview: Fiscal and Tax Management from the Enterprise Lifecycle Perspective
⚠️ Disclaimer: This content is compiled based on publicly available information and does not constitute professional tax advice. For specific operations, please refer to the latest official documents from the State Taxation Administration or consult a professional tax advisor.