China passed a value-added tax (VAT) law that will take effect on January 1, 2026, consolidating existing regulations and retaining exemptions for certain items. VAT is China’s biggest tax category, contributing about 38% of national tax revenue in 2023, according to official data. The newly approved law allows exemptions for some agricultural products, imported scientific research equipment, selected goods for the disabled, and services provided by welfare institutions. The government can add more deductible items to bolster specific sectors. This latest move means 14 of China’s 18 tax categories now have dedicated laws, covering most of the country’s tax revenue. Separately, China has introduced VAT incentives to support the property market and extended a VAT refund policy to encourage domestic and foreign research institutions to buy locally made equipment.