China Completes VAT Implementation

Since May 1st 2016, China has now fully rolled out a value-added tax (VAT) system across all industries that previously had a business tax. This completes the most ambitious overhaul of its tax regime in three decades.

China has been moving progressively over the past years from a Business Tax (BT) system to a Value Added Tax (VAT) system in an attempt to streamline China’s indirect tax system. The VAT reform project was launched first as a pilot program in January 2012 in Shanghai with an objective to remove dual indirect tax system and to give Chinese business a better global competitive tax structure in order to boost the economy’s growth.

The final four service sectors, financial services, consumer services, real estate and construction completed the transition to VAT in all service sectors. The replacement of VAT with Business Tax will mean the end of double taxation that businesses in China have faced.

Oracle R12 Chinese VAT free goods

Similar to Italian VAT and Malaysia GST, in China there is a requirement to charge VAT on the supply of free goods such as samples or free gifts.

There is no standard functionality from Oracle to accommodate this but eBiz Answers have developed a simple work around to accommodate this issue.


Reach out to us on this page for further information.

Oracle e-Business Suite R12 and Chinas Golden VAT system

Golden Tax is one of the Golden Projects initiated by the Chinese government to modernize the information technology of China. The Golden Tax project refers to an integrated nationwide value-added tax (VAT) monitoring system. For more information see our previous blog:

China’s VAT and the ‘Golden Tax system’

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Chinas VAT and the Golden Tax System

Chinas VAT and the ‘Golden Tax system’

The indirect tax regime in China, consists of VAT, Business tax (BT) and Consumption tax (CT)


As the most important tax in China, the VAT is a circulation tax levied on the added value at each phase of a product’s typical life cycle. It obtains the deduction phase by phase so that the final tax is equal to the sum of the taxes on each production phase. Continue Reading

Oracle R12 eBTax China Golden Tax

Intercompany Transactions in R12 & a Global Implementation of Oracle eB Tax, incl EU & APJC VAT, US Sales/Use & China Golden Tax