The Ministry of Finance and the State Taxation Administration have jointly issued Announcement No. 14 of 2026 regarding the release of the "Value-Added Tax Prepaid Tax Management Measures." In accordance with relevant provisions of the "Implementing Regulations of the Value-Added Tax Law of the People's Republic of China," and to continue existing systems and practices, the Measures have been formulated and are now promulgated, taking effect from January 1, 2026. Where previous regulations conflict with this Announcement, the provisions of this Announcement shall prevail.
Chapter I: General Provisions. Article 1: These Measures are formulated in accordance with the relevant provisions of the "Implementing Regulations of the Value-Added Tax Law of the People's Republic of China." Article 2: Taxpayers (excluding individuals, the same below) who fall under the circumstances specified in Paragraph 1, Article 45 of the VAT Law Implementing Regulations shall prepay VAT in accordance with these Measures.
Chapter II: Providing Construction Services Across Prefecture-Level Administrative Regions. Article 3: Taxpayers providing construction services across prefecture-level administrative regions (including counties/districts under directly administered municipalities) shall prepay VAT to the competent tax authorities in the location where the construction service is provided, based on the stipulated time when the tax liability arises. Article 4: For taxpayers providing construction services across regions, the prepayment rate is 2% when the general calculation method is applied, and 3% when the simplified calculation method is applied. Article 5: Taxpayers providing cross-regional construction services shall calculate the VAT to be prepaid using the following formula, based on the balance of the total current-period tax-inclusive price for the service after deducting subcontracting payments: Prepayable Tax = (Total Current Tax-Inclusive Price - Subcontracting Payments) / (1 + Applicable Tax Rate or Levy Rate) × Prepayment Rate. If the balance after deducting subcontracting payments is negative, it may be carried forward for deduction in subsequent prepayment periods. Taxpayers must calculate and prepay taxes separately for each project.
Chapter III: Providing Construction Services by Receiving Advance Payments. Article 7: Taxpayers providing construction services by receiving advance payments shall generally prepay VAT to the competent tax authorities at their establishment location, except as provided in the second paragraph of this Article. Taxpayers receiving advance payments for cross-regional construction services shall prepay VAT to the tax authorities in the location where the service is provided; no further prepayment is required after the tax liability arises. Article 8: For taxpayers providing construction services by receiving advance payments, the prepayment rate is 2% under the general calculation method and 3% under the simplified calculation method. Article 9: The prepayable VAT for such services is calculated using the formula: Prepayable Tax = (Advance Payments Received - Subcontracting Payments) / (1 + Applicable Tax Rate or Levy Rate) × Prepayment Rate. A negative balance can be carried forward.
Chapter IV: Selling Real Estate Projects by Presale. Article 11: Taxpayers selling real estate projects by presale shall prepay VAT to the competent tax authorities at their establishment location. This refers specifically to real estate development enterprises selling their self-developed projects by presale. Article 12: For such presales, the prepayable VAT is calculated as: Prepayable Tax = Advance Payments Received / (1 + Applicable Tax Rate or Levy Rate) × 3%. Article 13: Prepayment must be made during the tax filing period of the month following receipt of the advance payment.
Chapter V: Transferring or Leasing Immovable Property Located in a Different County from the Taxpayer's Establishment. Article 14: Taxpayers transferring or leasing immovable property located in a different county from their establishment shall prepay VAT to the competent tax authorities in the property's location when the tax liability arises. Article 15: The prepayment rate for transferring such property is 5% for general taxpayers and 3% for small-scale taxpayers. Articles 16-21 detail specific calculation formulas, documentation requirements for deductions, prepayment rates for leasing (3% or 5% for general taxpayers depending on the calculation method; 3% for small-scale taxpayers, with a special rule for individual businesses leasing housing), and the prepayment timeline.
Chapter VI: Oil and Gas Field Enterprises Selling Production-Related Services Across Provinces. Article 22: Oil and gas field enterprises selling services related to crude oil and natural gas production across provincial boundaries shall prepay VAT to the tax authorities where the service occurs. Article 23: The prepayment rate is 5% for services in Xinjiang and 3% in other regions. Article 24: The calculation formula is: Prepayable Tax = Total Current Tax-Inclusive Price / (1 + Applicable Tax Rate or Levy Rate) × Prepayment Rate. Article 25: Prepayment is due by the end of the tax filing period in the month following the arising of the tax liability.
Chapter VII: Collection and Administration. Article 26: Small-scale taxpayers required to prepay VAT under these Measures are exempt if their total current price and advance payments (excluding VAT) at the prepayment location do not reach the VAT threshold. Article 27: Prepaid VAT can be credited against the current period's VAT payable using the tax payment certificate; any excess credit can be carried forward. Article 28: Taxpayers involved in cross-regional construction services or services with advance payments must maintain a prepayment ledger detailing project-specific information and present relevant contract and invoice copies during prepayment. Article 29: Failure to prepay tax at the required location within 6 months of the deadline will result in handling by the establishment location's tax authorities per the Tax Collection and Administration Law. Article 30: For oil/gas field enterprises operating across provinces, the head office summarizes the VAT payable, allocates it based on production shares, and each field pays its allocated amount locally. Methods for intra-provincial enterprises are determined by provincial authorities.
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