Announcement on Issuing the Administrative Measures for Prepayment of VAT

Issued by:	Ministry of Finance (MOF), State Taxation Administration (STA)
Issue No.:	Announcement No. 14 [2026] of MOF and STA
Release Date:	January 30, 2026
Effective Date:	January 1, 2026
Links:	https://fgk.chinatax.gov.cn/zcfgk/c102416/c5247497/content.html

According to Article 45 of the Implementation Regulations of the Value-Added Tax Law of the People's Republic of China, five categories of circumstances—including providing construction services across prefecture-level administrative regions and selling real estate projects through advance payment methods—require prepayment of VAT as prescribed. This Announcement provides further provisions on this basis, essentially continuing the existing institutional framework and operational practices. The main contents are as follows:

Consolidation of Provisions Concerning the Prepayment Base, Prepayment Rate, and Place of Tax Payment for Five Types of Circumstances Subject to VAT Prepayment.

Tax Payable in Advance = Prepayment Base ÷ (1 + Applicable Tax Rate or Levy Rate) × Prepayment Rate

Prepayment Scenario	Prepayment Base	Prepayment Rate	Place of Prepayment
Providing construction services across prefecture-level administrative regions	Net amount between revenue (including tax) and the subcontracted payments	General method: 2% Simplified method: 3%	Location where the construction service is provided
Providing construction services with advance receipts	Net amount between current advance receipts and subcontracted payments	General method: 2% Simplified method: 3%	Not-cross-regional: Place of business registration Cross-regional: Location where the service is provided
Selling real estate projects with advance sales	Total amount of current advance receipts	3%	Place of business registration
Transferring real estate located in a different region	Non-self-built: Net amount between revenue (including tax) and original purchase price Self-built: Total revenue (including tax)	General taxpayers: 2% Small-scale taxpayers: 3%	Location of the real estate
Leasing real estate located in a different region	Total revenue (including tax)	General taxpayer (General method): 5% General taxpayer (Simplified method): 3% Small-scale taxpayer: 3% (individual business at levy rate)	Location of the real estate
Oil and gas field enterprises providing services across provinces	Total revenue (including tax)	Xinjiang region: 5% Other regions: 3%	Location where the service is provided

Unified and Standardized Administration of Tax Collection

Small-scale Taxpayer Threshold Exemption: If the total revenue and advance receipts (excluding VAT) realized at the prepayment location does not reach the threshold, no prepayment is required.
Tax Credit Rules: Prepaid taxes may be credited against the tax payable for the current period, and any amount not fully credited may be carried forward to subsequent periods.
Ledger management obligation: Enterprises providing construction services across regions or with advance receipts must establish a prepayment tax ledger, registering information such as taxable prices, advance receipts, subcontracting payments, and prepaid taxes on a project-by-project basis, and retain contracts, invoices, and other supporting documents.

Liability for overdue payment : If prepayment is not made within six months of the due date, the tax authority at the place of business registration shall, based on the specific circumstances, impose late payment fees and fines in accordance with the Law on the Administration of Tax Collection.