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China: Reinstatement of VAT on government and financial bonds

Effective August 8, 2025

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August 15, 2025

The Ministry of Finance (MOF) and the State Taxation Administration (STA) on July 31, 2025, jointly issued Announcement No. 4 [2025], providing that value added tax (VAT) will be reinstated on interest income from newly issued government bonds, local government bonds, and financial bonds issued on or after August 8, 2025.

Announcement 4 defines “financial bonds” as "valuable securities issued by financial institution legal entities established within the territory of the People's Republic of China in accordance with the law on the national interbank bond market and exchange bond markets, which repay principal and interest as agreed."


For more information, contact a tax professional with the KPMG member firm in China:

Jennifer Weng | jennifer.weng@kpmg.com

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