VAT is chargeable on the sale of goods, provision of processing and repair service, and the importation of goods within the People's Republic of China.Generally, output tax charged on the sales of goods may be set off against input tax incurred on the purchase of the goods or materials.

Value Added Tax (VAT) is levied on all units and individuals engaged in the sale of goods, the provision of processing, repairs and replacement of services, sales of services, intangible assets, real estate and imported goods within the territory of the People’s Republic of China.

Remarks: Timeline for submission of deduction data and application of specific additional deduction by taxpayers. Taxpayers enjoying specific additional deduction other than deduction for critical illness medical expenses. Taxpayers not enjoying or not enjoying in full amount of specific additional deduction at tax withholding and prepayment step.

On February 2, 2023, China’s top tax administration body, the State Administration of Taxation (thereafter ‘SAT’) issued the “Announcement of Annual Individual Income Tax Declaration for Comprehensive Individual Income for Fiscal Year of 2022”, which provides detailed guidance for handling the annual individual income tax declaration for fiscal year of 2022. We have sorted out the main content of this announcement as following for your reference.