On Sep. 3, CHI Tax introduced VAT withholding rules for specified services.
CHI Tax, CHI GVT issued Administrative Measures for Domestic Entities’ Withholding and Remittance of Value-Added Tax for Natural Persons.
The measures required domestic entities to withhold and remit VAT when paying natural persons for specified taxable services, including R&D, software, design, consulting, cultural, educational, and certain media production services.
Document dated Sep. 3, 2026, received from CHI Tax Sep. 7, summarized on Sep. 9.
Key Points
VAT is calculated as the sales amount multiplied by the prescribed levy rate, subject to applicable VAT preferential policies.
Where qualifying transactions with a single withholding agent reach the applicable per-transaction/day VAT threshold, VAT must be withheld upon payment unless the natural person has already paid the tax.
Withholding agents must generally file and pay the withheld tax within the first 15 days of the following month and must also withhold applicable surtaxes and fees.
Withholding agents must correct returns where VAT changes due to a discount, cancellation, or return; retain required records; protect specified information; and report specified noncompliance to the tax authority.
The measures generally do not apply where qualifying platform workers’ VAT is handled under separate internet-platform reporting rules.
Effectiveness
The measures take effect on Nov. 1, 2026; qualifying transactions occurring from Jan. 1 to Oct. 31, 2026 remain subject to self-declaration by the natural person.
Sep. 4, 2026 Filing Instructions, Forms
On Sep. 4, 2026, CHI Tax issued filing instructions for domestic entities’ withholding and remittance of VAT and surtaxes for natural persons, and related declaration form.
The return requires details on the withholding agent, the natural person, the taxable transaction, sales amount, applicable levy rate, tax reductions or exemptions, VAT withheld, and related surtaxes.
Transactions with the same natural person on different dates or involving different taxable transaction types must generally be reported separately.
The supporting schedule covers urban maintenance and construction tax, education surcharge, and local education surcharge, including applicable rates and reductions.
Where an invoice has already been issued on the natural person’s behalf, certain VAT and surtax fields do not need to be completed.
Paper filings must be submitted in duplicate, with one copy retained by the withholding agent and one by the tax authority.
The requirements take effect on Nov. 1, 2026.
Document dated Sep. 4, 2026, received from CHI Tax Sep. 7, summarized on Sep. 9.
