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Chinese fapiao (legal invoices) and trends in digitisation

Chinese fapiao (legal invoices) and trends in digitisation.

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In January 2021, over 25 regions entered China’s pilot program for digital special VAT fapiao or e-fapiao. What started as a trial in Ningbo during the second half of 2020 was rapidly expanded towards other areas of China.

Although currently still in its rollout phase, this development will significantly impact companies throughout China. This article will shortly review e-fapiao and its benefits.

What is a fapiao?

A fapiao is a Chinese document used for registering the generation of revenue and VAT, i.e. a receipt mentioning the services sold, to whom it is sold, and the VAT rate. All Chinese business entities are obliged to issue these documents to their customers in China for payments received.

This document is printed on special paper that is provided by the State Tax Administration. Companies (including foreign-invested companies) can purchase the paper from their local tax bureau. Restrictions apply to the amount of fapiao that can be purchased as a means of supervision by the tax office.

The fapiao are always numbered and company-specific. Typically, a printed fapiao has two or three layers. One layer is for internal bookkeeping, and the other layers are given to the customer.

Every month a company should declare the amount of fapiao issued at the tax bureau. The fapiao is one required document for cost recognition of expenses within China, as it represents VAT paid by the customer and proves the official circulation of the transaction.

A foreign-invested company must require its suppliers to provide a fapiao and also print fapiao for its customers in China.

There are two types of fapiao in China:

  • General VAT fapiao: a type of fapiao in which the issued VAT cannot be deducted. This type of fapiao has already been digitalized and is often seen in restaurants, taxis or in e-commerce transactions.
  • Special VAT fapiao: these are fapiao issued when providing (taxable) services or goods. Special VAT fapiao can be used for VAT deductions.

How is the e-fapiao different?

The special VAT digital fapiao, or e-fapiao, is currently still implemented on a voluntary basis and can be used as an alternative to the printed version. As its name suggests, it is no longer a printed paper fapiao to deliver to customers.

Indeed, after issuing e-fapiao, customers can receive it by email or QR code and then print it on A4 paper by themselves. Although the procedure is entirely digital, all data still needs to be added manually to the document. It is expected that the system will be rolled out nationally in the future and replace the current paper documents.

For a company in a pilot zone to start issuing e-fapiao, it needs to complete an application first. The company will receive a special token from the bureau, after which it can log in to the online platform to issue the e-fapiao.

Restrictions such as on the maximum value of one fapiao remain in place. Naturally, the company needs to be a general taxpayer to qualify. Before a company can issue e-fapiao, it needs to apply first at their local tax bureau. Restrictions such as on the maximum value of one fapiao remain in place.

One can check the validity of e-fapiao online on the local tax website. The website for Beijing can be found here.

What are the benefits of e-fapiao?

The national introduction of e-fapiao will result in a decrease in the workload that is required to ensure financial compliance. For example, checking the validity of fapiao will become easier, as one can check this online on the local tax website.

However, a file management system for e-fapiao needs to be established. In terms of current bookkeeping and accounting regulations, little will change.

Anyone operating a company in China knows how much paperwork and administration are needed to stay compliant. A digital system will save a lot of paper documentation and thus is better for the environment.

Still, a streamlined process is needed to ensure that all parts can be digitalised, especially for audit purposes. Currently, general VAT e-fapiao must still be printed and included physically in the monthly accounting books.

Do you want to know if your company is eligible for the e-fapiao, or are you interested to learn more details regarding the application and usage of fapiao or e-fapiao? Acclime China is a regional expert provider of accounting, tax, consulting and corporate services and helps clients seamlessly advance their businesses and interests in China.

For more information about fapiao or other related matters, please contact Maxime at for a (digital!) meeting.

Contact our teams for expert support and further information about accounting & tax requirements in China to ensure you are compliant in the market.

Christophe Marquis, Director, Shanghai,
Mei Qian, Accounting Services Director,
Emily Shi, Partner,

About Acclime.

Acclime China helps established multinational companies and startups start and operate their business in China. By seamlessly navigating our clients through the complexities of the Chinese laws and bureaucracy, we allow them to reclaim valuable time and fully focus on growing and developing their business.

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