Core Viewpoint - The article discusses the public consultation on the draft implementation regulations for the Value-Added Tax (VAT) Law in China, which aims to ensure the smooth implementation of the VAT Law starting from January 1, 2026. The draft provides detailed clarifications on various tax system elements, enhancing the certainty and operability of the tax system [2][16]. Summary by Sections General Provisions - The draft specifies definitions for taxable transactions involving goods, services, intangible assets, and real estate [3]. Taxpayer Definitions - Clarifications are provided regarding taxpayers, including units and individuals, general taxpayers, and small-scale taxpayers [4]. Consumption of Services and Intangible Assets - The draft clarifies the circumstances under which services and intangible assets are consumed domestically [5]. VAT Invoices - It is specified that VAT special invoices must separately indicate sales amounts and VAT amounts [6]. Export Goods and Cross-Border Services - The draft clarifies the scope of export goods and cross-border sales of services and intangible assets, along with applicable rules for multiple tax rates [7][8][9]. Tax Payable Details - Specific provisions regarding the calculation of payable VAT, including input tax deduction methods and rules, are detailed [10]. Input Tax Deductions - The draft outlines methods for input tax deductions and the scope of deductible tax certificates [11]. - It also specifies how to adjust VAT amounts and sales amounts in cases of sales discounts, returns, or cancellations [11]. - Further clarifications are made regarding non-deductible input tax for loan services and non-taxable transactions [13]. Fixed Assets and Long-Term Assets - The draft provides rules for input tax deductions related to fixed assets, intangible assets, and real estate [15]. Tax Incentives - The draft details tax incentives for sectors such as agriculture, education, healthcare, and elderly care, including the standards and conditions for these incentives [17]. International Practices - The draft incorporates international practices regarding the consumption location of services and intangible assets in cross-border transactions, aligning with global VAT legislative models [17].

Core Viewpoint - The implementation of the Value-Added Tax (VAT) Law and its accompanying regulations is crucial for establishing a comprehensive legal framework for VAT in China, ensuring its effective execution starting January 1, 2026 [1][2]. Group 1: Legislative Framework - The VAT Law Implementation Regulations are foundational administrative regulations that support the VAT Law, forming a complete legal system for VAT in China [1]. - The draft regulations consist of six chapters and fifty-seven articles, detailing tax rates, taxable amounts, tax incentives, and collection management, thereby enhancing the certainty and operability of the tax system [1][2]. Group 2: International Context and Principles - The VAT Law and its implementation regulations align with international practices, similar to VAT legislation in countries like the UK, Australia, and Switzerland, which also utilize a dual structure of a VAT law and its implementation regulations [2]. - The draft adheres to the principle of tax legality and reflects a high-quality development approach by specifying tax incentives for sectors such as agriculture, education, and healthcare, thus protecting taxpayers' rights [2]. Group 3: Specific Provisions and Innovations - The draft provides detailed explanations for the consumption of services and intangible assets within the country, addressing a longstanding challenge in international VAT legislation [3]. - It incorporates rules for determining the consumption location of cross-border services and intangible assets, aligning with international standards while considering China's specific context [3].