China Mandates Real-Time Digital VAT Invoicing (e-Fapiao) by Late 2025

China is moving toward a fully digital, real-time VAT invoicing system through e-fapiao. Fully digital invoices have been available nationwide since December 1, 2024, with full mandatory adoption expected by late 2025. The system uses real-time clearance for domestic B2B and B2C transactions, requires standardized electronic invoices, and enables instant reporting to tax authorities. All VAT-registered businesses can issue e-fapiao; invoices must be retained for 30 years, and non-compliance carries significant penalties. Although pre-filled VAT returns are not yet available, the e-fapiao framework is laying the foundation for future automated VAT reporting.

All VAT-registered Chinese businesses—both general and small-scale—can issue e-fapiao, which customers cannot refuse. Invoices contain standardized data fields, a digital signature, and a dynamic QR code, and are issued electronically via the national platform or API.

Clearance happens within seconds, meaning no separate e-reporting deadlines. Buyers and sellers can access all invoices in real time via their tax digital accounts. Non-compliance with invoicing rules can lead to fines, loss of tax credits, or even criminal penalties.

Invoices must be archived for 30 years, with electronic storage allowed if integrity, security, and accessibility are maintained, generally within China. Pre-filled VAT returns are not yet offered, but e-fapiao data will support future automation.

Overall, China’s e-fapiao reform is moving VAT compliance toward a fully digital, highly controlled environment. Businesses should prepare now by upgrading systems, integrating with the STA platform, and aligning processes with real-time digital oversight.