China expands its e-invoicing pilot programme


In December, China’s State Taxation Administration (STA) announced further expansion of the trial programme (Pilot) to 38 regions in the country. The pilot enables specific Chinese taxpayers to issue VAT special electronic invoices on voluntary basis. The pilot project started in September 2020. 

Special VAT invoice are typically B2B invoices that can be used to reclaim VAT as opposed to general VAT invoices where VAT cannot be reclaimed, and which are mostly used for B2C transactions. 

The pilot is currently restricted to newly registered taxpayers in the regions included in the pilot (see for a list at the end of this update) can issue special electronic VAT invoices following the conditions established in those jurisdictions. However, recipients can be established in any region.  

Local Tax Bureaus in the pilot regions will handle the verification of invoice types for new taxpayers who apply for VAT invoices for the first time. Note: each province’s tax bureau can determine the criteria for the type of VAT invoices these new taxpayers can use, which includes the special VAT invoices.   

Special Vat e-invoices will be in OFD format, a China-specific fixed format. E-invoices must be archived in this format for 30 years. Local archiving requirements will apply. 

It is important to note that if the buyer wishes to receive paper invoices, the supplier must issue these, following the requirements for special paper invoices 

Requirement for electronic signatures 

For special e-invoices (or special e-fapiao), the ‘wet stamp’ will be replaced by an electronic signature instead. The State Tax Authority offers a service that enables users to check and validate the e-signature. The same platform also allows invoice recipients to download the special e-fapiao. 

Red-Letter special invoice 

The issued e-fapiao can be amended if required. The taxpayer issues credit note, known as a red-letter special invoice, that is compliant with the requirements of the local bureau.  

What next? 

The process of submitting/retrieving the special VAT e-fapiao is still fully manual, i.e. it has not yet been automated and ported to the cloud. As soon as the services are available in the cloud, China will be ready for full-scale nationwide e-invoicing. 

The STA does not seem to be planning mandatory usage of the special VAT e-fapiaoWe will continue to monitor China’s progress very closely and regularly report on updates. 


ShijiazhuangHangzhouTianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Anhui, Guangdong, Chongqing, Sichuan, Ningbo, ShenzhenBeijing, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Fujian, Jiangxi, Shandong, Henan, Hubei, Hunan, Guangxi, Hainan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Dalian, Xiamen and Qingdao.