On December 25, the 13th Meeting of the Standing Committee of the 14th National People's Congress passed the VAT Law, which will come into force on January 1, 2026. Value added tax is the largest tax category in China. With the promulgation of the Value added Tax Law, 14 out of the current 18 tax categories in China have been legislated, covering the vast majority of tax revenue and making significant progress in implementing the principle of tax legality. What content in value-added tax law is worth paying attention to? Value added tax is the largest tax category in China. Last year, the domestic value-added tax revenue was 6.93 trillion yuan, accounting for about 39% of the total tax revenue. In the first 11 months of this year, the domestic value-added tax revenue was about 6.12 trillion yuan, accounting for approximately 37.8% of the national tax revenue. Value added tax, as a turnover tax and additional tax, levies taxes on the value-added generated during the turnover process of goods, services, intangible assets, and real estate. Li Xuhong, Vice President of Beijing National Institute of Accounting, stated that value-added tax taxpayers cover the vast majority of business entities and are closely related to the daily lives of the general public. Li Xuhong, Vice Dean of Beijing National Institute of Accounting: For example, if we buy a cup, in addition to the price of the cup, it has a value-added tax. All of our daily transactions, including goods, services, real estate, and intangible assets, involve value-added tax. From the perspective of financial management, as long as there is a transaction, payment must be made. As the purchaser, an accounting voucher is also required to record the payment before it can be recorded. This value-added tax invoice is also an important voucher in all our transaction records, so the impact is very significant. The value-added tax law passed this time consists of six chapters and 38 articles, mainly including: defining the scope of value-added tax collection, clarifying that units and individuals who sell goods, services, intangible assets, real estate, and import goods within the territory of the People's Republic of China are taxpayers of value-added tax; Clarify the tax rate and taxable amount, maintain the current three tax rates of 13%, 9%, and 6% unchanged, and apply zero tax rate to some goods and services exports; Standardize tax incentives and set a tax threshold for small-scale taxpayers; Clearly state that value-added tax is levied by tax authorities, and value-added tax on imported goods is levied by customs on behalf of the authorities; Ensure proper connection with relevant laws. In recent years, China has promoted a series of reforms on value-added tax and accelerated the establishment of a modern value-added tax system. Li Xuhong stated that the passage of the Value Added Tax Law consolidates the achievements of recent value-added tax reforms, enhances tax system certainty, stabilizes expectations, and boosts confidence. It is an important achievement in deepening the reform of the fiscal and taxation system. Li Xuhong, Vice Dean of Beijing National Institute of Accounting: In fact, in this process, from the initial "business tax to value-added tax reform", to the subsequent optimization and simplification of value-added tax rates, to the improvement of our retention and refund system, to the promotion of its legislation, it can be said that it is a very significant achievement in the process of improving our modern tax system. Its legislation has a very positive significance in enhancing the certainty of our tax system. It is worth noting that the value-added tax law passed this time will not be implemented in the upcoming year of 2025, but will start on January 1, 2026. Regarding this, Li Xuhong stated that it is common practice to implement the law after a period of time has passed, which will provide taxpayers with an adjustment period and facilitate future arrangements. Li Xuhong, Vice Dean of Beijing National Institute of Accounting: Because value-added tax involves all aspects of daily transactions, as long as there are daily transactions, there must be this tax. So, companies need to understand that there is also a preparation process required to effectively connect and support accounting, as well as a series of work such as data, electronic invoices, etc. The Third Plenary Session of the 20th Central Committee of the Communist Party of China proposed to fully implement the principle of statutory taxation. With the enactment of the Value Added Tax Law, 14 out of the current 18 tax categories in China have been legislated, covering the vast majority of tax revenue. Li Xuhong stated that accelerating the pace of tax legislation is an inevitable requirement for promoting the modernization of the national governance system and governance capacity, which has positive significance for optimizing the tax business environment and promoting high-quality development. Li Xuhong, Vice Dean of Beijing National Institute of Accounting: The main and major tax categories, such as the largest value-added tax, corporate income tax, and personal income tax, have all been legislated, which means that we have achieved very important results in implementing tax laws. The remaining few tax categories, some of which are small taxes, as well as consumption tax, will gradually improve their legislation in the future with the development of our economy and society, and promote the completion of all tasks in our tax legislation work. (New Society)