A fapiao is China’s official tax invoice — the only document that proves a business transaction for tax purposes. Issued under the supervision of the tax authorities, the fapiao is the backbone of China’s VAT system: businesses can only claim input VAT credits with valid fapiao, and expenses without fapiao are generally not deductible for corporate income tax.
Why Fapiao Compliance Matters
In most countries, a seller simply issues an invoice. In China, invoices are state-regulated: fapiao are numbered, printed or issued digitally through the tax bureau’s system, and must match the taxpayer’s registered business scope and tax categories. Issuing an incorrect or unverifiable fapiao is a tax-compliance violation, and using fake fapiao carries criminal liability. For foreign companies, this makes fapiao management a core bookkeeping discipline rather than an administrative afterthought.
The Shift to E-Fapiao
China is transitioning the entire system to fully digital e-fapiao. New companies are onboarded onto the digital platform from day one, which changes how finance teams issue, verify and archive invoices. For the step-by-step implications, see our guide to the fully digital e-fapiao transition.
How Foreign Companies Stay Compliant
Practical fapiao compliance means verifying supplier fapiao before payment, issuing fapiao within the correct scope and tax rate, and reconciling input credits monthly. For a complete walk-through, read our VAT and fapiao compliance guide for WFOEs, or contact our bookkeeping and tax team. Browse the full China business glossary for more terms.
Disclaimer: This glossary entry is for general information only and does not constitute legal or tax advice. Consult a qualified professional for advice specific to your situation.
