Issue invoices only for real transactions; small-scale taxpayers should use the full VAT exemption allowance

Through the end of 2027, small-scale taxpayers with monthly sales under 100000 yuan or quarterly sales under 300000 yuan owe no VAT. Where the rate would have been 3%, it is cut to 1% for the same period. The other way around, paying someone to issue invoices so you can offset tax is fictitious invoicing: starts at up to 3 years, plus a fine of 20000–200000 yuan.

Cost

No money. Don't buy invoices, sell invoices, or issue invoices for someone else's sham bookkeeping. Invoice and file taxes only for business that actually happened.

Benefit

Businesses that are small and tax under the simplified method are small-scale taxpayers. The law says «sales that have not reached the threshold are exempt from VAT». That line is the threshold. From 1 January 2026 through 31 December 2027, the threshold is 100000 yuan by month or 300000 yuan by quarter. Per transaction or per day it is 1000 yuan; below that line, no VAT. In the same window, the 3% rate is cut to 1%, except sales and rentals of real estate and transfers of land-use rights. On the flip side, issuing VAT special invoices—or other invoices usable for tax offset—without a real purchase or sale is fictitious invoicing. Up to 3 years' imprisonment or short-term detention, plus a fine of 20000–200000 yuan. Issuing for others, for yourself, having others issue for you, or introducing others to issue all count. Larger tax amounts involved: 3–10 years. Huge amounts: 10 years or more, or life (nationwide).

Notes

The VAT Law took effect on 1 January 2026. The two earlier small-taxpayer relief notices—2023 No. 19 and 2023 No. 1—stopped applying or were repealed. The amount thresholds did not change, but the legal basis did; this item follows the new texts. The Criminal Law page cited is the 1997 version; Article 205's imprisonment tiers were later adjusted by amendments—only the tiers verified here and left unchanged are listed. What is exempt is VAT; income tax is separate. «Having someone issue invoices to offset costs» is fictitious invoicing, not tax saving.

Sources · 3

1. 全国人大常委会 (2024). 增值税法（2026 年 1 月 1 日施行，第二十三条）. fgk.chinatax.gov.cn/zcfgk/c100009/c5237365/co…
2. 财政部、税务总局 (2026). 关于增值税法施行后增值税优惠政策衔接事项的公告（财政部 税务总局公告 2026 年第 10 号，第一、二、六条）. fgk.chinatax.gov.cn/zcfgk/c102416/c5247434/co…
3. 全国人大 (1997). 刑法（第二百零五条）. spp.gov.cn/spp/fl/201802/t20180206_364975.shtml