Southeast Asia Information Port News (www.dnyxxg.com) – China Mobile, China Unicom, and China Telecom successively issued announcements on February 1st, adjusting the scope of application of value-added tax (VAT) on telecommunications services, with the tax rate increasing from 6% to 9%, which will impact the companies' revenue and profits.
According to the announcements from the three major operators, the Ministry of Finance and the State Administration of Taxation recently issued the "Announcement on Relevant Matters Concerning the Specific Scope of Value-Added Tax Collection," stipulating that from January 1, 2026, within the territory of the People's Republic of China, the tax category applicable to business activities utilizing fixed-line networks, mobile networks, satellite, and the Internet to provide mobile data services, SMS and MMS services, and broadband Internet access services will be changed from value-added telecommunications services to basic telecommunications services, with the corresponding VAT rate increasing from 6% to 9%.
All three operators stated that this adjustment of tax category and rate will have a certain impact on the companies' revenue and profits.
According to industry analysts, this adjustment is essentially a "repositioning" of the tax category, rather than an increase in tax burden; it represents a reasonable definition of the attributes of telecommunications services under tax policy. The "repositioning" of tax categories further clarifies the public nature of basic communication services, which will encourage operators to focus more on their core businesses such as network construction and service support, reduce homogeneous marketing competition, improve the overall operational efficiency of the industry, and contribute to the high-quality development of digital economy infrastructure.
The "Announcement on Relevant Matters Concerning the Specific Scope of Value-Added Tax Collection," released on January 31, clarifies the scope of application for the 9% and 6% VAT rates, as well as the specific scope of sales of services, intangible assets, and real estate. Currently, China's VAT rates mainly have three tiers, with a basic rate of 13% and two preferential rates of 9% and 6% respectively. (End)
