PRC tax receipt verification.

PRC tax receipt verification, or fapiao (发票) in Chinese, is an official invoice issued by the Chinese government for goods or services purchased in China. Unlike invoicing systems in other countries, fapiao serves as a primary mechanism through which Chinese tax authorities monitor, record and verify the amount of tax paid on any given transaction. All business entities operating in China, including foreign-invested companies, are legally obliged to issue and collect fapiao in accordance with their business activity.

This guide covers how fapiao works, how to issue and manage it correctly, and how to respond when something goes wrong.

Types of fapiao

Fapiao can be broken down into two categories: general invoices and special VAT invoices.

General Invoice

General invoices are used in circumstances where special VAT invoices do not apply. Any business owner who is unable to issue a special VAT invoice should use these as their default invoice. They apply to business taxpayers, VAT small-scale taxpayers and VAT general taxpayers who cannot issue special VAT invoices. Examples include those selling commodities exempt from VAT or consumer goods sold to individuals such as clothing and cigarettes. They are issued when selling commodities, providing taxable services or conducting any other operation that results in revenue.

How fapiao are issued and managed

Each fapiao is numbered and company-specific. Every month, a company must declare the total number of fapiao issued to the tax bureau. A foreign-invested company is required both to collect fapiao from its own suppliers and to issue fapiao to its customers in China.

Key management obligations include:

• Maintaining a sequential and complete record of all fapiao issued and received
• Filing monthly declarations with the local tax bureau covering fapiao volumes
• Retaining fapiao as supporting documentation for accounting and audit purposes
• Ensuring fapiao are matched to the correct transactions in company books

The transition to e-fapiao

China’s tax authorities have committed to a fully digital fapiao system as part of a broader drive to modernise tax administration and improve compliance oversight. The e-fapiao has moved from regional pilot to national rollout and has fully replaced paper-based fapiao. Companies operating in China should ensure their internal processes are built to accommodate digital invoicing.

The e-fapiao is a fully digital version of the general VAT fapiao and special VAT fapiao. Rather than being printed on government-issued paper and physically delivered to the customer, it is issued through an online tax platform. Customers receive their e-fapiao by email or QR code and may print it themselves on standard A4 paper if required. The validity of an e-fapiao can be checked online through the relevant local tax authority’s website.

What has changed for companies?

In practical terms, the transition reduces the administrative burden of physical paper management and makes fapiao verification more straightforward. However, companies must establish or update internal file management systems to handle digital records, and should be aware that accounting procedures and bookkeeping regulations have not materially changed as a result of digitalisation.

Verification of fapiao

This formal receipt is important when conducting business of any kind in China. However, when relying on fapiao-based accounting, there are risks of fraud. That is why it is important to have a reliable team to help verify tax receipts. Verification is an important step in maintaining thoroughly checked and certified accounts.

Under the e-fapiao system, online verification has become more accessible. Companies can verify fapiao through:

• The national e-fapiao verification platform
• The local tax bureau’s online portal, for example the Beijing municipal tax website for companies based in Beijing
• Third-party accounting or ERP systems that integrate with tax authority databases

Fapiao compliance and audit risk

Fapiao compliance is one of the most scrutinised areas during tax audits in China. The tax authorities have comprehensive visibility over fapiao issuance and collection through their centralised system, which means discrepancies are relatively straightforward for auditors to identify.

Common fapiao-related audit triggers include:

• Significant gaps or inconsistencies between fapiao issued and declared revenue
• High volumes of general VAT invoices claimed as expenses which do not match business scale
• Fapiao collected from suppliers in regions or industries frequently associated with fraudulent invoicing
• Mismatches between fapiao content and the actual nature of the transaction recorded

Companies should treat their fapiao records as a first line of defence in any audit scenario. Maintaining well-organised, complete and verified fapiao documentation significantly reduces the risk of adverse findings during a tax inspection. This is closely connected to broader tax compliance requirements and the integrity of a company’s accounting records.

Conclusion

Fapiao sit at the heart of tax compliance in China. Whether a company is adapting to the ongoing e-fapiao transition or responding to a verification issue, getting the fundamentals right protects its VAT position, supports accurate corporate income tax reporting and reduces exposure to audit risk. For foreign-invested companies in particular, building robust fapiao processes from the outset is a practical necessity rather than an optional best practice.

How Acclime can help with Fapiao

Fapiao verification and management are areas where errors can carry significant financial and regulatory consequences. At Acclime, our teams of experts are well-practised in fapiao compliance, verification and the ongoing transition to e-fapiao. We help companies maintain records that meet accounting standards, remain audit-ready and stay aligned with the latest regulatory developments in China.

For more information about fapiao management, e-fapiao applications or related compliance matters, please contact Acclime China.