The e-Fapiao (Fully Digitalized E-Fapiao) in China: New VAT Law

China has emerged as one of the world leaders in the adoption of electronic invoicing, known as “Electronic Fapiao” or Fully Digitalized E-Fapiao (电子发票).

In recent years, the country has moved from promoting the adoption of electronic invoices to building a comprehensive real-time VAT administration model based on digital data.

The widespread adoption of fully digitalized electronic invoices, which began in December 2024, has optimized the business environment, improved administrative efficiency, and facilitated the digital transformation of the economy and society.

The government’s goal is to achieve the complete digitization of invoice management, digitizing all information contained in paper invoices and enabling the tracking of the documents’ lifecycle. This reform integrates various types of invoices into a single electronic invoice format, which has the same legal validity and serves the same function as the current paper “fapiao.”

China’s Electronic Invoice - e-Fapiao

In China, the term "fapiao" denotes the invoice. A fapiao is a legally recognized physical receipt issued on paper, distributed, printed, and overseen by the State Taxation Administration (STA), serving as evidence of the purchase of goods and services in China. Companies operating in China are required to obtain fapiao from the STA before conducting sales, essentially settling taxes before finalizing transactions. Depending on the industry and projected revenue, companies are obligated to procure various types of fapiao, each with a restricted maximum quantity. These fapiao types include general fapiao, general fapiao with VAT, and special VAT fapiao.

Types of e-Fapiao

There are six kinds of fapiao co-existing in China during the country’s ongoing fapiao system reforms. The six types are special VAT fapiao, general VAT fapiao, special VAT e-fapiao, general VAT e-fapiao, fully digitalized special VAT e-fapiao, and fully digitalized general VAT e-fapiao.

E-Fapiao serves as the digital counterpart of the traditional fapiao and comes in two categories: general and special. Much like its paper counterpart, general e-Fapiao is generated for commercial transactions involving a product or service, and the Value Added Tax (VAT) is non-deductible. On the other hand, special e-Fapiao permits the deduction of VAT and falls within the realm of business-to-business (B2B) transactions.

The fiscal digitization initiative in China has progressed in two phases, differentiating between non-deductible invoices, referred to as General e-Fapiao, and deductible invoices, known as Special e-Fapiao.

General e-Fapiao Electronic Invoice

The initial invoices to undergo digitization were General e-Fapiao in 2015. Given their non-deductible nature for recipients, their implementation was relatively uncomplicated compared to Special fapiao. In 2017, the government opted to broaden the application of General e-Fapiao to high-frequency transaction sectors, including e-commerce, telecommunications, finance, and express mail, as part of an effort to encourage greater adoption of electronic invoicing.

Special e-Fapiao Electronic Invoice

Building on the success of General e-Fapiao, in 2020, the government chose to digitize deductible invoices by introducing Special e-Fapiao through Announcement No. 22 (2020) regarding the "Implementation of VAT Electronic Invoices among Newly Established Taxpayers." This regulation was progressively embraced by all Chinese provinces throughout 2021.

In both instances, the utilization of e-Fapiao is obligatory for new taxpayers and voluntary for other companies.

China’s VAT Law: A Key Step Toward Digital Taxation

On January 1, 2026, China implemented the supporting regulations for its new Value-Added Tax (VAT) Law.

This legislation reinforces several fundamental pillars of the digital tax system:

• Invoice governance
• Taxpayer identification and monitoring
• Tax information exchange
• Digital tax administration

One of the most significant effects is that tax authorities can now monitor invoices in near real time.

In practice, this means that:

• Electronic invoices are integrated into the VAT control system.
• Tax information flows directly between businesses and tax authorities.
• Tax administration increasingly relies on structured data and automation.

In other words, e-invoicing is no longer just a technological option: it is part of the tax system itself.

Timeline of e-Invoicing implementation in China

China is already at an advanced stage of adoption, and the digital invoicing system is now dominant in the Chinese business ecosystem.

The country is evolving from a model focused on invoice digitization toward a much broader system: fully digital, real-time VAT administration.

The digitization of invoicing in China did not happen overnight, but rather through a gradual process of expansion and consolidation. Over the past few years, the country has moved from conducting pilot tests to building a national real-time digital invoicing ecosystem linked to VAT.

The evolution of e-Invoicing in China reflects a clear trend: the country is building a system in which invoicing and VAT management are integrated into a digital infrastructure monitored in real time.

Evolution of the Golden Tax System in China

The development of the Golden Tax System has been one of the key pillars in the modernization of tax administration in China. Through various phases, this system has evolved from a basic model of digital tax supervision into an advanced VAT control infrastructure based on data and automation.

Golden Tax Phase I: Introduction of Digital Tax Oversight

During this initial stage, technological tools were introduced to partially digitize tax control, particularly regarding the issuance and validation of invoices. The main objective was to improve tax oversight and reduce tax fraud in a system that had previously relied heavily on manual processes.

This phase laid the groundwork for the subsequent development of a more advanced tax control system.

Golden Tax Phase II: Expansion of VAT Control

During this period, new technological systems were introduced that enabled:

• Improved oversight of VAT invoices.
• Strengthened control over the issuance of invoices by businesses.
• Expanded digitization of tax processes.

This stage consolidated the role of the Golden Tax System as a central tool for VAT control in China.

In 2012, the State Taxation Administration of China (STA) launched a pilot program to implement electronic invoices in sectors such as e-commerce and transportation. The initiative began in cities like Beijing, Shanghai, and Shenzhen and focused on facilitating operations for large online sales platforms.

Between 2019 and 2021, the STA promoted tax reforms to standardize the use of electronic invoicing nationwide. In 2020, the China Tax Bureau (CTB) required new taxpayers in the country to adopt the new B2B electronic invoicing system known as the Golden Tax System or Fapiao System. Other taxpayers could opt in voluntarily.

Golden Tax System III - Fully Digitalized e-Fapiao - 3 数电发票

The phase known as Golden Tax System III began in December 2021. As of December 1, 2023, all regions of the country allowed pilot companies to issue fully digitalized e-fapiao through the electronic invoicing service platform.

The main objective was to unify the tax authorities’ technological infrastructure, enabling the integration of tax data at the national level.

Among its main advances are:

• The consolidation of tax data platforms.
• The connection of various regional tax systems.
• The improvement of analysis and monitoring capabilities.

This phase paved the way for the transition to advanced electronic invoicing and real-time digital monitoring.

The fully digitized e-fapiao is a new type of invoice that differs from the standard VAT e-fapiao and the traditional paper fapiao. It contains 17 elements: dynamic QR code, invoice number, issue date, buyer information, seller information, project name, specification and model, unit, quantity, unit price, amount, tax rate, tax amount, total, ad valorem, and total tax (in words and figures), remarks, and invoice.

Golden Tax System IV - Natural System - 4 全电发票

Phase IV marks the transition to a fully digital tax administration.

Golden Tax Phase IV introduces advanced big data technologies, intelligent analytics, and electronic invoicing integration, connecting multiple information sources within a single monitoring environment.

To support implementation, the STA has developed another platform called the “Leqi Platform.” This platform allows companies that meet certain criteria to connect with the tax authority via the API, thereby automating the exchange of information.

December 1, 2024 marked a key milestone in China’s tax digitization strategy. On this date, the State Tax Administration announced the nationwide rollout of fully digital invoices.

With this launch:

• Digital invoices became available nationwide.
• They gained the same legal validity as paper invoices.
• A unified national invoice numbering system was introduced.
• Invoice delivery began to be carried out through digital tax accounts.

This step marked the beginning of widespread adoption of the new invoicing model.

Effective December 1, 2024, the State Tax Administration announced the promotion of fully digitized electronic invoices (e-fapiao) for civil aviation passenger transport. This announcement specifies that public air transport companies and air transport sales agencies registered in China may issue electronic invoices for domestic passenger transport services. The electronic itinerary serves as a fully digitized invoice, containing essential information such as the invoice number, national and international identification, passenger identification details, itinerary information, fare, fuel surcharge, amount and rate of VAT, and the Civil Aviation Development Fund.

Starting in 2025, digital invoices began to be used more and more widely in both B2B and B2C transactions.

Tax authorities actively promoted their use among businesses and economic sectors, accelerating the transition toward a fully digital tax environment.

By the end of 2025, China’s goal was to move toward a fully digitized VAT ecosystem, where electronic invoices would become the predominant format for all economic transactions.

This model is based on real-time data transmission and monitoring, enabling tax authorities to improve tax compliance oversight and reduce fraud.

Key Platforms of China’s e-Fapiao System

In China’s current e-Fapiao (fully digitized electronic invoice) system, there are two main national platforms operated by the State Taxation Administration (STA).

These platforms form the core of the country’s electronic invoicing ecosystem and centralize the processes of issuing, managing, and verifying VAT invoices.

National Electronic Invoice Service Platform: Electronic Invoice Service Platform (电子发票服务平台)

This platform is the central national system used to issue, transmit, and manage e-Fapiao in China.

The entire lifecycle of the electronic invoice is carried out through it.

Its key functions include:

• Issuing fully digitized invoices.
• Delivering electronic invoices to the buyer.
• Storing invoice data.
• Providing access to invoices through taxpayers’ digital tax accounts.
• Allowing invoices to be downloaded and printed.
• Facilitating future integration with enterprise ERP systems.

National VAT Invoice Verification Platform: National VAT Invoice Verification Platform (全国增值税发票查验平台)

This platform is used to verify the authenticity of VAT invoices (fapiao).

It allows users to check whether an invoice actually exists within the tax authority’s system and whether its data is correct.

Its functions include:

• Verifying the authenticity of the invoice.
• Validating the invoice number and associated tax data.
• Confirming that the invoice is registered in the tax authority’s system.
• Facilitating verification by buyers, auditors, and finance teams.

How does electronic invoicing work in China?

Electronic invoicing in China operates through a validation or clearance model:

1. The invoice is sent in XML format to the State Taxation Administration (STA).
2. The national platform validates the invoice and includes the required elements: validation confirmation, Key ID, and QR Code.
3. Once validated, the platform sends it to the invoice issuer in PDF or OFD format.
4. The invoice issuer then sends it to the recipient.

Unlike paper invoices, digital invoices exist only in digital format and are issued as single copy documents. Each digital invoice features a unique 20-digit number, structured to include the last two digits of the calendar year, a regional code for the provincial tax authority, a digit indicating the channel of issuance and a sequential code. 

EDICOM’s e-Fapiao Solution - China Golden Tax System 

The adoption of China’s fully digitized e-Fapiao system means that many companies must integrate their internal systems with the State Tax Administration (STA) platforms.

One of the keys to operating efficiently within China’s e-invoicing ecosystem is direct integration between a company’s ERP and the STA’s systems.

EDICOM’s solution provides a preconfigured connector between the company’s ERP and Chinese tax platforms, enabling the automation of data exchange and significantly reducing the technical complexity of the project.

Thanks to this integration, companies can:

• Automate the issuance and transmission of e-Fapiao.
• Synchronize tax information between the ERP and the STA platform.
• Reduce development and technical maintenance efforts.

Through this integration, EDICOM connects directly to the issuer’s ERP to send invoice information to the national platform. Once the invoice is processed by the tax authority, the system receives the validated file that includes all elements required by the STA to grant it legal validity.

These elements include:

• Validation confirmation by the tax authority
• Invoice Key ID
• Official QR code

All this information is automatically reintegrated into the issuer’s ERP, ensuring that the invoice recorded in the business system contains all the data necessary to comply with tax requirements.

At the same time, EDICOM also allows the electronic invoice to be automatically sent to the recipient via the channel chosen by the company.

Benefits for International Companies

Foreign companies operating in China often face greater regulatory and technical complexity. In this context, an integrated solution offers particularly significant advantages:

• Reduced reliance on local tax specialists in China.
• Reduced risk of regulatory non-compliance.
• Faster implementation of electronic invoicing processes.

A complete end-to-end workflow

The solution also enables the management of the entire electronic invoice lifecycle—from creation to validation and storage—within an end-to-end workflow.

This allows companies to centrally control electronic invoicing processes, ensuring operational efficiency, traceability, and tax compliance within the e-Fapiao digital environment.