China

Modules

The following modules are installed automatically with the Chinese localization:

Localization overview

The Chinese localization package ensures compliance with Chinese fiscal and accounting regulations. It includes tools for managing taxes, fiscal positions, reporting, and a predefined chart of accounts tailored to China’s standards.

The Chinese localization package provides the following key features to ensure compliance with local fiscal and accounting regulations:

• Chart of accounts: a predefined structure tailored to Chinese accounting standards

• Reporting

• Taxes: pre-configured tax rates, including standard VAT, zero-rated, and exempt options

• Fiscal positions (tax and account mapping): automated tax mapping based on the fapiao type for domestic customers and suppliers, and a dedicated fiscal position for foreign ones

Chart of accounts

Two independent charts of accounts are available, depending on the selected fiscal localization package: China - Accounting Standards for Business Enterprises and China - Accounting Standards for Small Business Enterprises.

Reporting

Each fiscal localization package includes dedicated Balance Sheet and Profit and Loss reports, based on the corresponding chart of accounts.

To access these reports, go to Accounting ‣ Reporting and select Balance Sheet or Profit and Loss.

Taxes

Both packages share the same pre-configured taxes. To view them, go to Accounting ‣ Configuration ‣ Taxes.

The taxes are designed to feed the tax report. Most taxes and tax grids are assigned to a line of Schedule 1 - Sales Details or Schedule 2 - Input Tax Details, so that amounts are classified and totaled automatically. The tables below show the schedule line for each tax.

Each tax name follows a pattern that identifies the tax rate or treatment, the type of supply or purchase, and the supporting document: a fapiao (official invoice issued through the Electronic Tax Bureau) or a receipt. Understanding this pattern simplifies the search for the right tax.

Output VAT (sales)

Output VAT taxes are named [Rate or treatment] [Scope] [Fapiao type], using the codes below.

The tax rate and scope determine the line of Schedule 1 - Sales Details, while the fapiao type determines the column:

• S (VAT Special Invoice): columns 1 and 2

• O (VAT Other Invoice): columns 3 and 4

• N (No Invoice): columns 5 and 6

The general tax calculation method applies tax rates to sales and allows the deduction of input VAT. The simplified tax calculation method applies levy rates to sales and does not allow the deduction of input VAT.

The following table shows the available combinations and the corresponding line of Schedule 1 - Sales Details. Where a cell shows two values, the first applies to goods and the second to services.

The following taxes apply to the 3% levy rate reduced to a lower rate. Only the O (VAT Other Invoice) fapiao type is available, so these taxes are not split by fapiao type, and the amounts are reported in columns 3 and 4 of Schedule 1 - Sales Details.

Input VAT (purchases)

Input VAT taxes are named [Rate] I [Document]. The document code identifies the supporting document that justifies the tax.

Tax grids for specific scenarios

Some VAT scenarios are not configured as taxes. Instead, each scenario is an independent tax grid defined directly in the formulas of the tax report.

To report an amount under a specific grid, open a draft invoice, bill, or journal entry. In the Journal Items tab, select the grid in the Tax Grids field of the relevant journal item. A tax grid can be used alone, without applying a tax rate, or combined with a tax when the amount also needs to follow a tax rate.

Items subject to refund upon collection

Input tax transferred out

Contacts

To configure contact information, open the Contacts app, search for the contact, and access its form. Then, configure the following fields:

• Name

• Address, including the City, State, Zip Code, and Country.

  • In the Street field, enter the street name, number, and any additional address information.

• Tax ID: Tax identification number (Unified social credit code)

• Phone

• Email

Accounting

Tax report

The following tax report is available in the Chinese localization:

• VAT Return (General Taxpayer) (CN)

  This report includes four components:

  • Main Form

  • Schedule 1 - Sales Details

  • Schedule 2 - Input Tax Details

  • Surtaxes and Surcharges Schedule

To access the report, go to Accounting ‣ Reporting ‣ Tax Report.

VAT differential taxation

VAT differential taxation allows taxpayers to calculate VAT on the balance of the sales amount after deducting specific amounts paid to third parties, instead of on the full sales amount. This method applies to businesses where part of the amount received from customers is passed on to other parties, such as travel agencies, labor dispatch, and agency services.

Deductible amounts are recorded as balance deductions on the customer invoice. An output VAT offset entry is then automatically posted to reduce the output VAT accordingly. The fapiao can be issued either for the full amount or for the net amount after deduction.

Configuration

To configure VAT Differential Taxation, follow these steps:

1. Go to Accounting ‣ Configuration ‣ Settings.

2. In the Taxes section, activate VAT Differential Taxation.

3. Update the following fields if needed:

   • Journal: Journal in which output VAT offset entries are posted. By default, Miscellaneous Operations is selected.

   • Offset Account: Account used to record the output VAT offset. By default, 2221.01.03 Tax Payable - VAT (Offset of Output VAT) is selected.

4. Click Save.

Workflow

VAT differential fapiao creation

1. Go to Accounting ‣ Customers ‣ Invoices and create a new invoice.

2. In the VAT Differential Taxation Method field, select Full Amount Fapiao or Net Amount Fapiao.

3. In the Invoice Lines tab, add the products.

4. On the relevant invoice line, click ✎ Deduction to fill in the balance deduction details. These details correspond to the deduction information entered in the Electronic Tax Bureau when issuing a net-amount fapiao.

5. In the Balance Deductions Information tab, click Add a line for each voucher that supports a deduction, fill in the following fields, then save:

   • Voucher Type: Type of voucher supporting the deduction.

   • Voucher Total: Total amount stated on the voucher.

   • Deduct Amount: Amount of the voucher deducted from the sales amount of this invoice line.

   • E-Fapiao Number: The e-fapiao number, if the voucher is an e-fapiao.

   • Receipt Code: Code of the voucher, if applicable.

   • Voucher Number: The voucher number, if the voucher is not an e-fapiao.

   • Issue Date: Date on which the voucher was issued.

   • Expense Account: Account in which the cost related to the deduction is recorded.

   

6. Confirm the invoice.

Output VAT offset entry

Depending on the selected VAT Differential Taxation Method, the journal entries are handled automatically in two different ways:

• Net Amount Fapiao: Upon confirmation, an output VAT offset entry is automatically posted.

  Note

  A Net Amount Fapiao invoice cannot be confirmed if the Balance Deduction details are missing.

• Full Amount Fapiao: Filling in the Balance Deduction details prior to invoice confirmation is optional. The timing of the output VAT offset entry depends on when these details are provided:

  • Before confirmation: The entry is automatically posted upon invoice confirmation.

  • After confirmation: If left blank initially, the entry is automatically posted upon saving the balance deduction details later.

If the tax rate of an invoice line is 0%, no output VAT offset entry is posted.

Upon confirmation of a credit note, the output VAT offset entry is automatically reversed.

Calculation logic

The output VAT offset is calculated based on the tax-exclusive amount of the deduction.

The formula applied per invoice line is:

Output VAT offset = [Total deduction amount / (1 + Tax rate)] × Tax rate

Balance deductions ledger

To cross-check the data between the balance deduction details and the posted output VAT offset journal entries, go to Accounting ‣ Reporting ‣ Balance Deductions.

Accounting voucher

An accounting voucher is a document that records the details of a journal entry, used as a bookkeeping record in China.

Accounting vouchers are available to download in PDF format from any of the following locations:

• Accounting ‣ Customers ‣ Invoices

• Accounting ‣ Vendors ‣ Bills

• Accounting ‣ Accounting ‣ Journal Entries

To print the voucher of a single record:

1. Open the invoice, bill, or journal entry.

2. Click the ⋮ (vertical ellipsis) icon next to the record’s name.

3. Select Print ‣ Voucher.

To print the vouchers of multiple records in batch:

1. In the list view, select the relevant records.

2. Click • Print.

3. Select Voucher.