Expense rules in China.
All SAT rules: 13% Fapiao VAT, travel allowances and VAT recovery rules in China.
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1Expense rules & reclaimable VAT
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Business meals | 6% | Not deductible | Entertainment limit 0.5% revenue |
| Travel meals | 6% | 100% reclaimable | Special Fapiao required |
| Accommodation | 6% | 100% reclaimable | Special Fapiao required |
| Fuel | 13% | 100% reclaimable | Business records |
| Train / CR / flight | 9% | 100% reclaimable | E-ticket fapiao |
| Taxi / DiDi | 3% | Partial | DiDi e-fapiao |
| Client gifts | 13% | Not deductible | Entertainment expense |
| Parking | 6% | 100% reclaimable | Fapiao required |
Fapiao Special
Required for VAT input credit.
Fapiao General
General tax invoice, no ITC.
Retention
SAT records: 10 years.
2Mileage allowance
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Personal car | RMB 1,30/km | By company | Standard practice |
| Company car | Tax-exempt | — | If business records |
| Motorcycle / scooter | RMB 0,60/km | By company | Reduced rate |
No federal rate
No national rate.
MNC practice
Private sector standard.
Records
Date, destination, km, business purpose.
3Per diem and travel allowances
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| Beijing / Shanghai | RMB 300 | RMB 1,200 | RMB 1,500 |
| Tier 2 cities | RMB 200 | RMB 800 | RMB 1,000 |
| Senior executive | RMB 500 | RMB 2,000 | RMB 2,500 |
| Foreign — HK | RMB 800 | RMB 2,800 | RMB 3,600 |
| Foreign — London | RMB 1,200 | RMB 4,500 | RMB 5,700 |
MNC practice
Standard executive per diem.
Hotel separate
Lodging refunded on fapiao.
Fapiao required
Special fapiao for ITC.
4Foreign VAT recovery
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| China → EU | No reciprocity | — | No agreement |
| France | No reciprocity | — | No agreement |
| United Kingdom | No reciprocity | — | No agreement |
| Switzerland | No reciprocity | — | No agreement |
| USA | No recovery | — | Sales tax not recoverable |
| CN VAT for foreign | None | — | No mechanism |
No B2B refund
No general B2B procedure.
Special cases
Few special cases (R&D, export).
Outbound
CN company cannot recover EU VAT.
Industrialize your China expenses with Illizeo.
VAT 13%/9%/6%, Fapiao OCR system, MNC per diem, multi-currency CNY↔USD↔EUR↔CHF: all the SAT rules above are natively integrated into Illizeo.
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