Oil Prices Rise as Ukraine Targets Russian Energy Infrastructure 
Oil Prices Hold Steady as Ukraine Tensions and Fed Cut Expectations Support Market 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook 
Asian Currencies Steady as Rupee Hits Record Low Amid Fed Rate Cut Bets 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
U.S. Futures Steady as Rate-Cut Bets Rise on Soft Labor Data 
Europe Confronts Rising Competitive Pressure as China Accelerates Export-Led Growth 
China’s Services Sector Posts Slowest Growth in Five Months as Demand Softens 
Asian Currencies Edge Higher as Markets Look to Fed Rate Cut; Rupee Steadies Near Record Lows 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
China Urged to Prioritize Economy Over Territorial Ambitions, Says Taiwan’s President Lai 
Dollar Weakens Ahead of Expected Federal Reserve Rate Cut 
Asian Markets Mixed as RBI Cuts Rates and BOJ Signals Possible Hike 
Asian Markets Stabilize as Wall Street Rebounds and Rate Concerns Ease 
Germany’s Economic Recovery Slows as Trade Tensions and Rising Costs Weigh on Growth 
China has passed a comprehensive value-added tax law, effective in January 2026, consolidating regulations and offering targeted exemptions for sectors like agriculture, research, and welfare institutions. The reform aims to support economic recovery as the nation tackles sluggish demand.
China Consolidates VAT Rules into New Law Effective 2026
According to official news agency Xinhua, China's legislature passed a value-added tax bill on Wednesday, with the new law set to go into force on January 1, 2026. The bill consolidates earlier rules that had contained exemptions from the tax into a single document.
According to official statistics, in 2023, over 38% of China's national tax revenue came from value-added taxes, the country's largest tax category, Investing.com reports.
Specific legal requirements were omitted from the report. A number of items and services offered by welfare institutions, including daycares, preschools, and nursing homes for the elderly, as well as certain agricultural products, were exempted in the most recent draft.
Targeted Tax Exemptions for Critical Sectors
If the government wanted to help out a particular industry or company, they could expand what can be claimed as a tax deduction.
"With the introduction of the VAT Law, 14 tax categories out of 18 in China have their own laws, covering the majority of tax revenue and marking significant progress of implementing the principle of statutory taxation," the news agency reported.
Following a session that started on Saturday, the National People's Congress Standing Committee—China's highest legislative body—passed the law.
Real Estate Market Receives Tax Incentives
To prop up its distressed real estate market, China offered tax incentives for home and land purchases last month. When a resident sells their home at least two years after purchasing it, they are not liable for value-added tax.
The finance ministry announced in September 2023 that it would prolong a value-added tax rebate program until the end of 2027 in an effort to encourage local and international research institutions to buy equipment built in China.
VAT Adjustments to Bolster Economic Recovery
In 2019, China reduced the value-added tax rate for production to 13% from 16% and for transportation and construction to 9% from 10%.
Revenue from value-added taxes fell 4.7% year-over-year in the world's second-largest economy's first eleven months, to 6.1 trillion yuan ($840 billion), as companies faced poor domestic demand. November saw a rise of 1.36 percent in VAT receipts.
"The rebound in VAT reflects improving economic vitality, as sales and business activity recover. It may also indicate a recovery in industrial profits, further supporting economic momentum," Tommy Xie, head of Asia macro research at OCBC, wrote in a note on Monday.
