The Chinese government introduced an electronic invoice system called the e-Fapiao system in 2020. This is planned as a five-year digitalization process that will see the implementation of electronic invoices increasing across the country.
1. Will the e-Invoicing mandate come into effect for all taxpayers at the same time or will there be a gradual implementation?
The Chinese government started the implementation of the e-Invoice system with a pilot phase that began in 2020 and includes three regions. The number of the regions is gradually expanded. Three regions (Guangdong, Inner Mongolia, and Shanghai) joined the pilot system in December 2021. In 2022, more than 40 regions are working to integrate their systems into the new digitalized electronic invoicing system. The spread and use of electronic invoice integration throughout the country will continue until 2025.
2. What are the formatting and technical requirements of the electronic invoices going to be?
Issued invoices should be in electronic format but for now paper invoices are still valid because the digitalized e-Invoice system is not yet fully implemented.
3. What are the main ways of generating, transmitting, and receiving electronic invoices according to the new regulation?
The Chinese invoicing system is named Fapiao System (or the Golden Tax System). Additionally, e-Invoices (e-Fapiao) must be submitted to the government’s central platform. It shows that the Chinese e-Invoice system is an example of a clearance model. Invoices issued by taxpayers in the required format are verified through authorized entities.
4. What information should electronic invoices contain?
Chinese tax administration published a sample e-Invoice and it includes the information below:
- buyer and seller information
- invoice date and number
- dynamic QR code
- unit price and quantity
- tax rate and amount
- total price.
5. Is the electronic signature requested before the transmission of the invoices?
Yes, for both electronic and paper format invoices a signature is required. For paper invoices, a suitable type of seal may be used to sign.
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