Support for new China VAT invoice format (OFD)

What is happening?

In December, China’s State Taxation Administration (STA) announced further expansion of the trial program (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.

What does this mean?

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.

Its wider rollout would require the implementation of a new reader to capture this new file type.

The STA does not seem to be planning mandatory usage of the special VAT e-fapiao. We will continue to monitor China’s progress very closely

What are we doing?

The STA does not seem to be planning mandatory usage of the special VAT e-fapiao. We will continue to monitor China’s progress very closely.  Its wider rollout would require the implementation of a new reader to capture this new file type so we continue to monitor developments closely.

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