A Fapiao (发票, “issued ticket”) is the official tax invoice issued through China’s Golden Tax System for any commercial transaction in China. Every business-to-business transaction inside China must be supported by a fapiao, without one, the transaction is not deductible against income tax, the input VAT is not creditable, and the transaction effectively does not exist in tax records. Two main forms: the VAT-special-invoice (增值税专用发票) used by businesses to claim input VAT credits, and the VAT-general-invoice (增值税普通发票) used for retail transactions and contexts where VAT credit does not apply. For chemical exports specifically, the VAT-special fapiao is what supports the VAT export rebate claim.
What a fapiao looks like
A fapiao has standardised format requirements:
- Header with the issuer’s company name, tax registration number, address, telephone, and bank account
- Buyer’s tax registration details (for VAT-special fapiao)
- Goods or services with description, quantity, unit price, and tax-exclusive amount
- VAT amount broken out separately (VAT-special) or aggregated (VAT-general)
- Total amount in Chinese characters and digits
- Date of issue
- Tax control machine code, a series of numbers and bar codes generated by the Golden Tax System hardware
- Seal of the issuing company
Each fapiao has a unique serial number traceable through the Golden Tax System. A fapiao without the tax control machine code cannot be a real fapiao, it has not been registered with SAT.
VAT-special vs VAT-general fapiao
| Type | Use | Tax effect for buyer |
|---|---|---|
| VAT-special-invoice (增专票) | B2B transactions where buyer claims input VAT credit | Buyer credits the VAT; tax treatment is neutral over the supply chain |
| VAT-general-invoice (增普票) | Retail; B2B where buyer cannot or will not claim input credit | Buyer cannot credit VAT; the VAT is a final tax cost |
For an export-oriented Chinese chemical factory, the routine flow:
- Buy raw materials and utilities from domestic suppliers; receive VAT-special fapiao for each (claim input VAT credit)
- Sell finished product for export at zero-rated price (no VAT charged); the buyer is the foreign company, no Chinese VAT to invoice
- File the export-rebate claim with SAT, presenting the input VAT-special fapiao chain as evidence
The completeness of the input fapiao chain determines whether the rebate claim is approved. A factory missing some input fapiaos (cash purchases without proper fapiao) cannot prove the input VAT was paid, so cannot claim the corresponding rebate.
How foreign buyers see fapiao
A foreign buyer of Chinese chemicals does not receive a fapiao, fapiao is internal to the Chinese tax system. The buyer receives a commercial invoice for customs and accounting purposes. The Chinese factory uses the commercial invoice plus the bill of lading plus the export customs declaration as the “export proof” set, which together with the input fapiao chain supports the rebate claim.
Two implications:
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The commercial invoice value affects the Chinese factory’s rebate claim. The rebate is calculated as (FOB value × rebate rate). A higher commercial invoice value gives a higher rebate. This sometimes creates pressure from the factory to inflate the commercial invoice, relevant to anti-dumping investigations and to the buyer’s destination customs declaration.
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Currency in commercial invoice matters for the claim. The commercial invoice is typically in USD; the rebate is paid in RMB at the SAT-defined exchange rate on the date of customs declaration (different from the commercial-invoice exchange rate). The factory carries some FX exposure between invoicing and rebate receipt.
The fapiao authenticity problem
Fake fapiaos exist. They are produced outside the Golden Tax System and sold to businesses wanting to inflate input costs to reduce taxable income or claim improper VAT credits. Authentic-looking fakes use:
- Genuine fapiao paper (produced by SAT-licensed printers but stolen or counterfeit)
- Plausible tax control machine codes (random numbers that look correct)
- Real company information from public registries
SAT verifies fapiao authenticity by querying the tax control machine code against the central Golden Tax database. Any business can verify a fapiao at the official SAT website fapiao.chinatax.gov.cn. A fapiao that does not appear in the database is fake.
For a foreign buyer this matters indirectly. If a Chinese factory’s input fapiaos turn out to be fake, the factory cannot claim rebate, may face tax penalties, and may have its export licence suspended. Mid-contract supplier failure of this kind can stop deliveries and force buyer-side scrambling for alternate supply.
Operator note: the fapiao-vs-receipt distinction in negotiations
When negotiating with smaller Chinese suppliers, watch for “we don’t issue fapiao”, meaning the supplier is operating partly outside the formal tax system. Such a supplier:
- Cannot claim rebate (so the FOB price likely does not reflect the rebate-driven cost reduction)
- May not be able to issue export-side commercial invoices that match the input chain
- Carries higher risk of mid-contract licensing or tax issues
A factory that issues VAT-special fapiao consistently is operating in the formal tax system and is generally a more stable counterparty. Make fapiao-issuance capability a screening question on new supplier qualification.
Related terms
VAT export rebate is calculated against the export FOB and is supported by the input VAT-special fapiao chain. Golden Tax System is the IT infrastructure underlying all fapiao issuance and verification. Commercial invoice is the export-side document the foreign buyer sees; the fapiao is the China-side equivalent.