The year 2026 marks a watershed moment in invoice management. The Value-Added Tax Law will take effect on January 1, 2026, replacing the Provisional Regulations on Value-Added Tax, which have been in use for more than 30 years; at the same time, the rollout of fully digital electronic invoices (digital e-invoices) is entering a phase of accelerated implementation, and paper-based special VAT invoices are gradually being phased out.<\/p>\n
For finance professionals, the change isn\u2019t just that \u201dinvoices no longer require a tax control device\u201d\u2014it\u2019sRedesign of the Entire Voucher Logic<\/strong>The<\/p>\n According to industry reports, digital invoices will be fully implemented nationwide by 2026, and older versions of tax control devices will be phased out. The transition timeline may vary by region; please refer to notifications from the competent tax authorities.<\/p>\n Three things to complete in advance:<\/p>\n The risk is clear: invoices issued using outdated equipment after the transition period may be deemed non-compliant documents, and the related expenses will not be deductible for corporate income tax purposes. This provision affects not only output invoices but also the deductibility of all your costs and expenses.<\/p>\n The \u201dSmart Aggregation\u201d feature of the Golden Tax System automatically aggregates a company\u2019s invoices, social security data, individual income tax returns, and financial statement data to generate a tax profile for the company and proactively send risk alerts.<\/p>\n A common trigger scenario:Discrepancies in the Item Names Between Purchases and Sales<\/strong>. For example, if the purchase is for \u201dlumber\u201d but the sales invoice lists \u201dfurniture,\u201d even though they are essentially the same thing from a business perspective, the system\u2019s product database classifies them as belonging to different categories, so the system will automatically flag them in yellow.<\/p>\n The solution is to require suppliers, at the procurement stage, to issue invoices accurately based on product codes and names, and to avoid accepting vague descriptions such as \u201doffice supplies\u201d or \u201da batch of goods\u201d simply to save time. If a tax alert has already been triggered, you will need to prepare materials such as production process descriptions to explain the situation to the tax authorities.<\/p>\n Since electronic invoices do not have paper originals, the archiving method must be adjusted. Companies must archive electronic invoices electronically in accordance with tax requirements,The retention period is 10 years<\/strong>. Missing documentation may result in corrective actions and penalties during a tax audit.<\/p>\n We recommend establishing three ledgers:<\/p>\n Taking invoices for new and used vehicle sales as an example, according to industry sources, these types of invoices have been fully digitized. Red-ink adjustments for vehicle returns must also follow the red-ink confirmation form process, and the vehicle return agreement must be uploaded; otherwise, the system will display a message indicating that the vehicle identification number (VIN) is already in use.<\/p>\n More commonly, cross-month returns, price allowances, and invoicing errors must all be processed through the credit memo procedure; it is no longer acceptable to privately offset them by \u201dissuing a negative-value invoice.\u201d<\/p>\n Invoices are the starting point for tax compliance and the entry point for tax audits. Digital invoices are fully traceable throughout the entire process, making the risks and costs associated with issuing fraudulent invoices, claiming fraudulent tax credits, or accepting fraudulent invoices much higher than in the past. A company\u2019s invoices, contracts, funds, and the substance of its business must be consistent with one another.<\/p>\n The specific implementation timeline and operational guidelines will be subject to announcements issued by the State Taxation Administration and the competent tax authorities. Qi Cai Ying can assist enterprises with the upgrade and acceptance of their invoicing systems, as well as with the establishment of invoice ledgers and compliance audits for archiving.<\/p>","protected":false},"excerpt":{"rendered":" The Value-Added Tax Law will take effect on January 1, 2026. With the rollout of digital invoices entering its final sprint phase, paper-based special VAT invoices will be phased out. For finance professionals, the real challenge isn\u2019t the change in invoicing methods, but rather the need to ensure that invoice descriptions precisely match purchases and sales, the requirement to retain electronic records for 10 years, and the need to follow a new process for issuing credit memos. This article outlines three essential changes that must be made.<\/p>","protected":false},"author":10,"featured_media":18082,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,17,18,64],"tags":[2209,2210,1738,1739,345],"class_list":["post-18083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guide","category-allguide","category-recomguide","category-gf-tax-compliance","tag-2209","tag-2210","tag-1738","tag-1739","tag-345"],"yoast_head":"\nFirst thing: With the phase-out of paper special invoices, the invoicing system must be upgraded first.<\/h2>\n
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Second: The product description must match exactly; do not write \u201da batch of goods\u201d anymore.\u201d<\/h2>\n
Third: Electronic archiving, with records retained for 10 years<\/h2>\n
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The red-hot process must also be repeated.<\/h2>\n
A quick reminder<\/h2>\n