On 1 january 2026, the new version of the vat act was officially landed and has been in force for five months。
However, a large number of small and medium-sized companies and financial accountants are now following the old camp's change of logic in 2016 for accounting, tax reporting and contracting。
Focus: the way you're doing it, you're out of line
Many enterprises have recently received tax risk tips: income-splitting errors, anomalies in the application of tax rates, entry credit irregularities and irregularities in price tax accounting. The underlying reason was not an error in reporting, but a complete rewriting of the bottom logic of the vat, but the finance remained the same。
Once the new law had come to the ground, three core rules had been fully re-established: hybrid sales and joint-venture decisions, a reversal of logic, a major escalation of the rules of entry deduction, and formal statutoryization of price tax separation. Targeted dismantling of three high-frequency violation points today, accompanied by cases of good conduct, correct accounting methods, self-correction checklists, must be self-checked by all financial agents to avoid corporate tax risk
It's recommended that finance, owner's screenshots be kept and modified to avoid the focus of the second half of the vat inspection
I. Maximum area of error: complete rewriting of mixed sales vs and battalion decisions and direct overtaxation/warning of old methods
Over the past 10 years, all accounting default rules: look at the company's main business. Commercial and production enterprises are sold in 13 per cent mixed and service enterprises are taxed at 6 per cent。
But the new law has completely abolished the old rule of “judgment by subject”
2026 core changes in the new vat law: no longer look at the scope of business licences, only at the substance of individual transactions. Moreover, “a taxable transaction (mixed sale)” was found to be subject to a strict statutory precondition, and not a simple packaged receipt was considered a mixed sale。
New judge determination criteria (single criteria)
1. Mixed sales (a taxable transaction) has four statutory conditions (which must be met simultaneously): the same contract, the same customer and the same transaction occurring simultaneously; two or more different tax-rate operations; and the existence of a clear link of affiliation (the main business being the core of the transaction and the secondary business being a complement). Full satisfaction, with full taxation based on the main industry tax rate; no article of any kind is directly determined as a joint venture。
2. Side-to-side (several separate transactions): business is independent of each other, separately priced, separately performed, and must be accounted for separately and taxed separately; the maximum tax rate of 13 per cent is applied directly from the higher level if not accounted for separately。
• hf-3 violation enterprise (focus on self-checking)
1. Sale of equipment + installation of service enterprises (most accessible)
Old practice: the sale of equipment is accompanied by installation, all paid at 13 per cent。
New risk: if the contract specifies separately the cost of the equipment, installation services, the two operations may be performed independently, non-compulsory bundled, the “accidental, primary and secondary” conditions of the mixed sale are not met and are part of the operation and must be accounted for separately (13 per cent of equipment, 9 per cent of installation). The 13 per cent tax is still applied in full and is overtaxed; it is deliberately confused and triggers abnormally early warning rates. The case of a real pit-stamping company in suzhou, with the first half of the year equipment plus payment for packing, full 13 per cent billing and tax warning: business can be split, no forced master tie, no separate accounting requires higher taxes, ultimately adjusts accounts, corrects the declaration and pays the difference tax。
2. Renovation + material sales, design + construction integrated enterprises
Old practice: packing of receipts and uniform taxation of construction services at 9 per cent。
New risk: material sales, design services, construction services are stand-alone, detached operations, with no mandatory support, and part-time. The contract price was not accounted for separately and the system directly determined accounting anomalies and applied higher rates. The case of a real pit-stamping company in guangzhou, which collects a flat 9 per cent tax on the full amount of the fit-out, does not split the material, design, construction costs, is subject to a four-phase tax on screening rates, and is ordered to account for it and correct the declaration of prior periods。
3. Software sales + business after sale
Old practice: packing fees, all at 13 or 6 per cent。
New rules: software sales + instantaneous packages, which cannot be broken down separately, satisfy the main affiliation, taxable at the main industry tax rate; transport services that can be renewed separately, priced separately, delayed, are not part of the same taxable transaction, and are taxed at 6 per cent of a joint battalion and combined as direct violations. The case of real pit-stamping: shenzhen, a software company that rounded up the next year's separate payment for transportation and software sales, applied a uniform 13 per cent tax rate, was awarded an erroneous tax rate and generated tax-related warning。
A sentence summing up the new rules: look at the transaction, not at the subject; look at the substance, not at the licence, it can be a joint venture, not a mixed sale。
Two, three upgrades. Five months of non-compliance
Many accountants believe that the rules for the crediting of entries remain unchanged and are still subject to crediting and brainless selection. When the new law is put on the ground, the scope of the additions, the terms of the deductions, and the rules for their transfer have all been upgraded, which is also a disaster area for vat risk warning in 2026。
Upgrad 1: not a crediting build-up, but not a more accurate border (hf error zone)
Article 22 of the new law details the negative list of development deductions and focuses on three types of services: catering, daily residents, and recreational services. The new provisions are clear: if used directly only for the final consumption of the enterprise, the proceeds may not be offset; non-consumption scenarios, such as resales, co-operation in taxable projects, may be subject to deduction。
The current status of non-compliance: a large number of old accountants have followed the old rules, transferred all incoming meals, entertainment and daily services in full, and the amount of compliance deductions for free waste has led to extra taxes being paid by the enterprise; there are also some enterprises that have stepped back, making random deductions for staff welfare, end-consumption-type entertainment items and triggering an abnormal warning of crediting。
Upgrad 2: prohibition of “general deductions”, which must match business scenes
Four issues of the gold tax + the new law regulates: the invoicing name, purpose, business landscape, income structure must be highly matched and general deductions eliminated. True case: a purely consultancy firm, which does not have equipment for procurement, has substantially deducted invoices for mechanical equipment and construction materials, and has been awarded a default credit for non-matching of the scene, which requires the transfer of the entry and reimbursement of taxes。
This was a high-frequency early warning disaster area in 2026: the service enterprise had a significant credit for construction materials, equipment, consultancy, service fees, even if the invoices were true and well-processed, and had been found to be a breach of the law, subject to the transfer, correction and even reimbursement of taxes, as long as the business landscape did not match the product category。
Upgrading 3: tightening rules for the apportionment of payments of mixed assets
For fixed, intangible and immovable assets that are used simultaneously for tax exemptions, simple tax items and general tax items, the new law significantly tightens the threshold. No full crediting shall be made for those who are unable to distinguish between precise uses and to provide complete support for the purpose, and transfers must be made in proportion to income, and the old method of accounting, which used to be fully offset, is currently in full non-compliance。
Real case: a trade-related enterprise's premises are used for both simple tax warehousing and general tax-based production operations, with full deductions for rent, utilities in prior periods. The four-phase tax screening risk after the new landing resulted in a proportional retroactive transfer of the default credit deduction, resulting in additional tax-related costs。
Iii. Hf compliance error zone: the statutory principle of price tax separation landed! 90% of business contracts and books are not regulated
This is the core change that is most easily ignored but most at risk
(a) the old vat provisional regulations: the price tax separation is a practical practice and is not strictly required
Article 7 of the new vat act makes it clear that vat is extra-value tax and sales of taxable transactions do not include vat. While there are no legal penalties for mandatory contracts that specify tax amounts, a breakdown of contracts, accounts, certificates of full value tax is the best practice for avoiding errors in the tax base, tax-related early warning and the risk of irregular accounting。
New law compliance mandatory requirements
Business accounts, revenue desk accounts, and declaration data must make a strict distinction between sales without taxes, value added tax (vat) and total tax value. At the same time, it is strongly recommended that all taxable contracts be subject to a uniform price tax classification and that the confusion in tax collection be eliminated from the source。
Two types of hf violations for accounting purposes + model terms for standard contracts
1. The billing, unbilled income is centrally recorded at tax inclusive prices and is then split roughly at the end of the month
2. The contract is written only at the total price, is not divided between the price and the tax, and the financial account is maintained with tax。
Risk consequences: directly leading to incorrect tax bases, distorted income accounting, high risk of triggering abnormal tax rates, irregular early warning of accounts, and affecting the credit rating of enterprises。
New law standard contractual terms (direct replication) are applied: transactions under this contract do not contain tax price: $ xx; vat rate applicable: x per cent; vat amount: $ xx; total price tax amount: $ xx。
The case of a veritable pedal: a trading enterprise has been accounting for a long time at a price inclusive of taxes, unpriced undiscounted accounts, a distorted tax base after new and old policies have been brought together, and the first half of the year has been taxed for a full reconciliation of prior periods ' accounts, and for the redistribution of income and taxes, which has taken considerable labour time to overhaul。
Iv. Urgent self-retrofitting list! Land
In order to avoid the second half of the year being audited, tax reimbursements, and further delays, it is recommended that all enterprises immediately adjust:
(a) re-adjudicate all mixed and part-time operations against the four statutory conditions of the new act, with the possibility of dividing them into contracts and separate prices and separate taxes
(b) to eliminate the one-size-fits-all taxation of business entities, and to collect taxes separately and individually
(a) full reconciliation of entries against debits, matching of clean-up operations, irregular deductions and transfer of unremitted items
(b) a breakdown of the compulsory price tax for all new contracts, supplementing the old contracts and regulating the calibre of the accounts
Monthly reconciliation of sales matching, application of tax rates, and elimination of the confusion between high and low rates。
What kind of business are you in? Are the mixed-company, forward-fixing operations still being treated with old thinking
The comment area leaves the industry and frees you to check the new vat risk
Focus on me, keep updating 2026 new vat law's manual for drying up and avoiding pits! Private mail returns
Specialized services for the whole tour
