Other BriefingsChina Monthly Tax Brief: April 2026
In this China Monthly Tax Brief for April 2026, we cover a busy month of regulatory updates across China’s tax landscape.
China’s tax and regulatory landscape saw a flurry of activity in April 2026, with updates spanning consumption tax rules for beer and baijiu, electronic trade document regulations, expanded tax incentives for the semiconductor and software sectors, and further development of the ‘bank-tax interaction’ credit framework. Foreign-invested enterprises (FIEs) operating in China should pay close attention to several of these changes, which carry direct compliance and commercial implications.
This brief summarizes the key developments, explains what has changed, and highlights why each update matters to your business in China.
1. Beer consumption tax: New price comparison rule
On April 1, 2026, the State Taxation Administration (STA) issued the Announcement on Issues Concerning the Levy of Consumption Tax on Beer (STA Announcement [2026] No. 8), clarifying the method for determining the specific tax amount applicable to beer consumption tax.
What changed
Under the old rules, beer manufacturers that sold to a related distributor were required to use that distributor’s external selling price as the basis for calculating consumption tax. The new announcement changes this to a ‘higher of two’ rule: the taxable price is now the higher of (a) the manufacturer’s ex-factory price or (b) the related party’s external selling price. The effective date is April 1, 2026.
How related parties are identified
The rule uses the existing transfer-pricing definition of ‘related party’, which includes entities connected through shareholding of 25 percent or more (direct or indirect), loan dependency, licensing arrangements, shared management, or family relationships.
Why it matters to your business
For foreign-invested beer producers in China, whether operating joint ventures, wholly foreign-owned enterprises, or via a related distributor network, this change directly affects tax cost modeling. Two action points stand out:
- Recalculate tax exposure by brand and SKU. Under the new formula, if your ex-factory price is actually higher than the related distributor’s margin-adjusted resale price, you may now pay consumption tax on that higher figure.
- Review your intra-group pricing. If you want to use a lower ex-factory price without triggering a transfer-pricing adjustment, that price must be defensible on arm ‘s-length grounds. Document your pricing rationale now.
Key takeaway: Beer companies with related-party distribution structures should model their tax exposure under both the old and new rules and update intragroup pricing agreements accordingly.
2. Baijiu (white spirits) consumption tax: New filing schedules
On April 22, 2026, the STA issued the Announcement on Adjustments to Consumption Tax Return Forms (STA Announcement [2026] No. 9), introducing revisions to the Consumption Tax and Surcharges Return Forms. Two additional supplementary schedules specifically for liquor (baijiu) consumption tax were added. The announcement will take effect on June 1, 2026, with enterprises filing on a quarterly basis, implementing the changes starting from the July 2026 filing period.
What changed
The STA has revised the consumption tax return for baijiu producers, adding two new schedules that will be mandatory from June 2026:
| New Schedule | What It Captures |
| Schedule 6 – Baijiu consumption tax calculation detail | Sales volume, ex-factory price, and declared taxable price per SKU (minimum selling unit), split between related and non-related buyers. Covers all sales, invoiced and uninvoiced. |
| Schedule 7 – Related party distributor information | Names, regions, and period of relationship for all related distributors. First submission requires full manual entry; subsequent filings auto-populate unless changes occur. |
The underlying tax logic
Baijiu consumption tax is calculated on a ‘highest of three’ basis: the ex-factory price, the related party’s external selling price, or the tax authority’s minimum assessed price (MAP). The new schedules are designed to make this calculation transparent and verifiable at the line-item level.
Specifically, where no MAP has been set, and the product is sold to a related party: if the ex-factory price is less than 70 percent of the related party’s resale price, the authorities will assess a MAP at 60 percent of that resale price.
Why it matters to your business
Baijiu is a more specialized category, but some FIEs, particularly those in the premium or imported spirits space, or with interests in domestic spirits joint ventures, should note this as a signal of tightening compliance expectations across all excise categories. The practical steps for producers are:
- Adjust your ERP and data collection to track sales at the minimum-unit level (individual bottle, gift box, bulk, etc.).
- Ensure your related-party distributor register is current and that any changes in relationship status are reported promptly.
- Review intragroup pricing to ensure ex-factory prices are not structurally below the 60 percent
3. Electronic trade documents: data security and cross-border rules clarified
On April 17, 2026, 10 government authorities, including the Cyberspace Administration of China (CAC), the Ministry of Industry and Information Technology, the Ministry of Public Security, and others, jointly issued the Provisions on Promoting and Regulating the Application of Electronic Documents (Order No. 22 of 2026). The regulation aims to enhance the digitalization of goods trade and transportation, reduce overall logistics costs across the economy, and safeguard the lawful rights and interests of parties involved in electronic document activities.
The regulation takes effect on September 1, 2026, giving companies approximately four months to prepare.
The key provisions for importers and exporters
| Provision | What It Means in Practice |
| Cross-border data transfer exemption (Article 21) | Transferring e-document data overseas does not require a CAC security assessment, a personal information standard contract, or a personal information protection certification, provided the data either contains no personal information or important data, or the personal information is strictly limited to what is needed to issue, transfer, or exercise rights under the e-document. |
| Data security obligations (Article 20) | E-document system operators and users must implement end-to-end data security management and comply with applicable data storage regulations. Storage location and retention period requirements will matter. |
| Electronic identity authentication (Article 16) | E-signatures must comply with China’s Electronic Signature Law. Companies are encouraged to use nationally recognized e-identity verification services. |
| Digital RMB cross-border payments (Article 7) | Financial institutions are encouraged to explore digital RMB for cross-border payments, including smart contract applications. |
Why it matters to your business
For FIEs engaged in import/export, this regulation is broadly positive. The cross-border data exemption removes a major friction point. Previously, international trade data flows could in theory trigger CAC data export compliance requirements. The new rules provide a clear carve-out for trade document data, which should simplify your digital trade workflows.
However, the flip side is that data security obligations now apply explicitly to e-document systems. If your company uses a third-party e-document platform (common for e-bills of lading), review your contracts to ensure your provider meets the new storage and security standards.
Key takeaway: The September 1 effective date gives you time to review your e-document systems for data security compliance and to take advantage of the cross-border transfer exemption in your digital trade operations.
4. IC and software sector: 2026 tax incentive list applications open
On April 7, 2026, the National Development and Reform Commission, together with several other authorities, issued Fa Gai Gao Ji [2026] No. 487, officially launching the process for compiling the 2026 list of integrated circuit (IC) enterprises or projects and software enterprises eligible for preferential tax policies. The application period runs from April 7 to April 19, 2026, with qualifying major integrated circuit projects allowed to submit supplementary applications between September 7 and September 20, 2026.
China’s multi-ministry preferential tax framework for IC and software enterprises, anchored in Guo Fa [2020] No. 8, requires companies to be listed on an annual approved roster before they can claim benefits. The 2026 list registration window is now open. Companies already on the 2025 list must reapply if they wish to continue receiving benefits in 2026.
What incentives are available
| Incentive Type | Key Benefits |
| Import duty | Exemption from import customs duty on qualifying inputs; qualifying major IC projects may pay import VAT in installments over 6 years (0% in year 1, 20% per year thereafter). |
| Corporate income tax (CIT) | Depending on chip line width and years in operation: ‘two years exempt, three years half-rate’, ‘five years exempt, five years half-rate’, or up to 10 years full exemption. Key IC enterprises taxed at a reduced 10% rate in subsequent years. |
| R&D super-deduction | IC and industrial machine tool enterprises may deduct R&D costs at 120%; where capitalized as intangibles, amortization applies at 220%. This benefit is valid through December 31, 2027. |
How the listing process works
- Applications are submitted via https://yyglxxbs.ndrc.gov.cn/xxbs-front/
- Audited financial statements and a signed commitment letter are required.
- Once listed, companies may claim CIT benefits at the quarterly prepayment stage. If ultimately not listed at year-end, underpaid tax is settled without late-payment surcharges.
- If your company undergoes a name change, restructuring, or material change in business scope after listing, you must report this to the competent authority within 60 days.
Why it matters to your business
Foreign-invested semiconductor fabs, fabless design houses, chip packaging firms, and software companies operating in China are fully eligible for these incentives, provided they meet the relevant technical and operational criteria. Given the substantial tax savings on offer, particularly the R&D super-deduction and the extended CIT holiday, missing the application window is a costly oversight.
5. Bank-tax interaction: Tighter data governance and anti-fraud measures
On March 27, 2026, the STA, together with the National Financial Regulatory Administration (NFRA), issued the Notice on Further Deepening and Standardizing the “Bank-Tax Interaction” Mechanism (Shui Zong Na Fu Fa [2026] No. 19), aiming to further regulate data exchange, security management, enterprise authorization, and credit application mechanisms from the tax administration perspective.
What changed
The ‘bank-tax interaction’ program allows banks to use a company’s tax compliance data (with its consent) as a basis for assessing creditworthiness, particularly useful for SMEs that lack traditional collateral. The joint notice tightens the governance framework on four fronts:
- Standardized data scope: The STA and NFRA will publish and maintain a master list of what tax data can be shared. Local bureaus may only use data within that scope, based on business necessity.
- Mandatory consent: Banks must fully inform companies and obtain a written authorization specifying scope and duration before any tax data is accessed. Unauthorized or over-scope access is prohibited.
- Enhanced data security: A ‘minimum necessary access’ principle governs who within a bank can view tax data. Financial regulators will inspect data security practices in on-site examinations.
- Crackdown on invoice fraud: The tax authority will proactively flag companies suspected of circular or back-to-back fictitious invoicing to financial regulators, cutting off a known avenue for fraudulent loan applications.
Why it matters to your business
For FIEs in China, the bank-tax interaction program is primarily relevant if you are using Chinese banks for RMB financing and have authorized them to access your tax records for credit assessment. The new rules bring two key improvements:
- Clearer consent rights: You now have an explicit right to know exactly what data is being shared, with whom, and for how long. Read authorization forms carefully before signing.
- Stronger data protection: If you have concerns about confidential tax information being mishandled by lenders, the new security standards and inspection regime provide additional assurance.
The anti-fraud provisions are primarily aimed at domestic firms engaged in value-added tax (VAT) invoice manipulation, but FIEs should be aware that anomalous invoicing patterns, even inadvertent ones, can now trigger cross-referral between tax and banking regulators.
6. Pingtan Comprehensive Experimental Zone: Expanded VAT refund scope
On April 13, 2026, the Ministry of Finance (MOF) and the STA jointly issued Cai Shui [2026] No. 39, which introduces adjustments and optimizations to the scope of goods eligible for tax refunds under the “second line” policy in the Pingtan Comprehensive Experimental Zone.
What changed
Goods related to production shipped from mainland China into the Pingtan Comprehensive Experimental Zone (Fujian) via the ‘second line’ are treated as exports and are eligible for VAT and consumption tax refunds. These refunds are governed by a negative list, which means everything not on the exclusion list qualifies.
The latest adjustment shrinks the negative list, bringing three new categories into the refundable scope:
- Food processing inputs: Grains, dairy products, baked goods, and similar items (previously excluded under HS Chapters 9, 17, 18, 22).
- Digital economy goods: Mini data processing devices, unformatted flash memory storage, and related items (previously excluded under parts of HS Chapters 84 and 85).
- Transport equipment: Certain highway tractors (previously excluded under parts of HS Chapter 87).
Goods that remain excluded include:
- Items already ineligible for standard export VAT refunds;
- Goods purchased for commercial real estate projects in Pingtan (hotels, office buildings, residential and retail developments, entertainment and F&B venues); and
- Goods purchased by companies that have had their refund eligibility revoked.
The effective date for the revised scope is April 13, 2026, with the refund timing determined by the export date on the customs declaration.
Why it matters to your business
The Pingtan zone continues to attract foreign investment in manufacturing, logistics, and digital trade. If your company supplies production-related goods to Pingtan or is evaluating Pingtan as a supply chain or processing hub, the expanded refund scope reduces your landed cost on food processing inputs and digital hardware. Companies already operating in Pingtan should review their product lists against the updated negative list to identify any newly refundable items.
7. Charity organizations: New spending and cost rules
The Ministry of Civil Affairs, the MOF, and the STA jointly issued the Regulations on Annual Expenditures, Administrative Expenses, and Fundraising Costs of Charitable Organizations Conducting Charitable Activities (Min Fa [2026] No. 12).
What changed
The detailed rules define how registered charity organizations must calculate and disclose three categories of expenditure: charitable activity spending, management costs, and fundraising costs. Minimum spending ratios and cost caps have been set based on the organization’s type and net asset level.
Key thresholds include:
- Publicly fundraising foundations, social organizations, and service institutions must spend at least 70 percent of prior-year total income on charitable activities.
- Non-public foundations must spend at or above 6–8 percent of prior-year net assets on charitable activities (with those holding net assets below RMB 1 million also required to meet a 50 percent of income floor).
- Management costs for publicly fundraising foundations are capped at 10 percent of total expenditure; for social organizations and service institutions, the cap is 13 percent.
- Annual fundraising costs must not exceed three percent of the three-year average of donation income.
- Organizations with annual management costs below RMB 200,000 are exempt from the percentage caps.
Charities must disclose all three cost categories in their annual reports. Violations will be penalized by civil affairs authorities and referred to tax authorities.
Why it matters to your business
Many multinational companies in China operate corporate foundations or make structured donations to registered charities as part of their CSR programs. While these rules apply to the charity organizations themselves rather than to donors, donor companies should be aware of the compliance framework their partner charities are now subject to. In particular:
- If your CSR budget flows through a registered charity partner, confirm that the organization is meeting its minimum spending ratios. Non-compliance could affect its operating status and your donation’s deductibility.
- If your company operates its own registered charity entity in China, the new rules apply directly.
In brief: other updates
The following recent developments may be relevant depending on your sector and location in China.
Tax enforcement document reforms (STA Announcement [2026] No. 10, effective June 1, 2026):
The STA has revised a range of tax inspection documents, including inspection notices, on-site records, and interview records, to align with Ministry of Justice standards. The revisions expand information requirements around inspection scope, method, contact persons, and complaint rights. Three new documents are introduced for pre-approved inspections outside the formal audit track. Companies undergoing tax inspections from June onwards should familiarize themselves with the revised forms to understand their rights and obligations.
Zero-tariff access for 20 African countries (Tariff Commission Announcement [2026] No. 5, effective May 1, 2026 – April 30, 2028):
China is extending zero-tariff treatment to qualifying goods from 20 non-least-developed-country African states with which it has diplomatic relations. For companies with supply chains or sourcing strategies involving Africa, this creates potential cost advantages on applicable tariff lines. Consult the official announcement for the full country and product list.
Tax-exempt medical vehicles for charity program (Caishui [2026] No. 37):
The 18th batch of mobile medical vehicles donated under the ‘Mothers’ Health Express’ program, purchased with charitable donations and gifted to medical institutions, has been granted vehicle purchase tax exemption. Already-collected tax will be refunded by the competent tax authority.
AEO (Authorized Economic Operator) standards revised (Customs Announcement [2026] No. 34, effective April 1, 2026):
The GAC has updated AEO certification standards, introducing revised criteria for both Advanced Certified Enterprises and a new General Certified Enterprise tier. Companies holding or pursuing AEO status, which provides expedited customs clearance and reduced inspection rates, should review the new standards against their current compliance programs.
Shanghai partnership tax memo — investment income treatment:
Shanghai Tax has published a memorandum clarifying how partnerships with both corporate and individual partners should handle investment income. Individual partners pay progressive rates of 5–35 percent on business income and a flat 20 percent on dividends and interest from external investments. Corporate partners consolidate their share of partnership income into their own CIT returns. Critically, partnership losses cannot be used to offset a corporate partner’s own taxable income. FIEs investing in China through partnership structures, which are common in PE/VC arrangements, should review this guidance with their tax advisers.
Non-resident enterprise CIT annual settlement reminder (deadline May 31, 2026):
Per a notice from Xiamen Tax (and consistent with national requirements), non-resident enterprises with establishments or permanent establishments in China must complete their 2025 CIT annual settlement by May 31, 2026. This applies regardless of whether the enterprise was profitable or loss-making. Filing may be completed via the electronic tax bureau or at tax service halls.
Shenzhen land value increment tax (LVT) cost benchmark updated:
Shenzhen Tax has set the construction cost benchmark for 2026 LVT estimated appreciation calculations at RMB 5,120/m², increased by 30%, based on the average construction costs from settlements completed in 2024–2025. This applies to the calculation period for 2026 tax year projects. Real estate developers active in Shenzhen should update their LVT modeling accordingly.
About this brief
This monthly tax brief is prepared by China Briefing for informational purposes only. It does not constitute legal or tax advice. For guidance on how these developments affect your specific business, please consult a qualified adviser.
Tax planning and compliance in China can be complex and fast-changing. Our experienced advisors help businesses manage corporate tax, indirect tax, individual tax, international tax, and transfer pricing across China’s diverse regions.
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China Briefing is one of five regional Asia Briefing publications. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Haikou, Zhongshan, Shenzhen, and Hong Kong in China. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in Vietnam, Indonesia, Singapore, India, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
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