China's 2026 tax policy brings triple changes in legislative improvement, incentive extension, and regulatory upgrade, affecting business operating costs, personal income, and compliance reporting. The key points are summarized as follows:

I. Core Policy Implementation (Effective from January 1, 2026)

1. Formal Implementation of the VAT Law - VAT has been upgraded from regulations to law, with further standardization of tax scope, rate structure, and declaration rules, significantly improving policy stability
2. Small-Scale Taxpayer Benefits Extended (until end of 2027)
   • Monthly sales ≤100,000 yuan (quarterly ≤300,000 yuan): Exempt from VAT
   • 3% levy rate items reduced to 1%
   • Per-transaction threshold increased to 1,000 yuan
3. Small Micro Enterprise Income Tax Benefits Extended
   • Annual taxable income ≤3 million yuan: Actual tax burden 5%
   • Enjoy "Six Taxes Two Fees" reduction support
4. Tax Collection and Invoice Upgrade
   • Full electronic invoice promotion, simplified declaration process
   • Golden Tax Phase IV data networking, integrated monitoring of contracts, funds, invoices, and inventory
   • Elimination of short tax periods (1, 3, 5 days), reducing tax handling costs

II. Key Industry and Individual Benefits

• Production/Life Service Industries: Input tax additional deduction policy continued
• Tech SMEs: R&D expense additional deduction ratio increased
• Individual Investors: Innovation Enterprise CDR related tax benefits extended until end of 2027
• Cross-Border E-commerce: Support policies including tax-free export return goods continued

III. Corporate Compliance Reminders

• Enjoy benefits strictly according to actual business, avoid false cost claims and inconsistent three-stream
• Timely adjust invoicing, accounting, and declaration processes to meet new VAT law requirements
• Pay attention to policy directions and implementation timing for export tax rebates and industry-specific benefits