Published by ChinaMNC · Jinchuan

China's Tax Agenda for the 15th Five-Year Plan: What Foreign Founders Should Know

A ChinaMNC briefing on the State Taxation Administration's July 2026 press conference, summarizing tax data for the first half of 2026 and reform priorities for the 15th Five-Year Plan, framed for foreign founders operating in China.

Tax Signals for Foreign Founders: H1 2026 Data and the 15th Five-Year Plan

On 28 July 2026, China's State Council Information Office held a press conference under its "Starting the 15th Five-Year Plan" series. Officials from the State Taxation Administration (STA), including Administrator Hu Jinglin, Deputy Administrator Wang Daoshu, spokesperson and Chief Economist Rong Hailou, and Chief Auditor Wang Shiyu, presented tax reform and development priorities for the 15th Five-Year Plan period and took questions. For foreign founders registering or running a company in China, the session offers useful context on compliance expectations, cross-region operations and the direction of tax administration.

Overall Economic Picture from Tax Data

The STA said the 15th Five-Year Plan's opening year has started steadily, citing tax big data as evidence of economic performance. Key first-half 2026 figures included:

• Active business entities: the number of active registered entities handling tax matters and operating normally rose 20.2% year on year; the number filing tax returns with tax due rose 10%.
• High-tech and digital sectors: sales revenue of high-tech industries grew 15%, and core digital economy industries 8.7%, with their shares of total enterprise sales revenue up 1.7 and 1.1 percentage points respectively.
• Profits in new-economy manufacturing: high-tech manufacturing profits rose 29.2%, and digital product services profits 64.4%.
• Foreign investment: the number of foreign-invested tax-registered entities increased 10.9%; declared profits of foreign-invested enterprises rose 4.5%; export tax rebates processed for enterprises grew 7.7%.

Tax and fee revenue collected by tax authorities totaled RMB 16.7 trillion in the first half of 2026. Tax revenue exceeded RMB 10 trillion, up 4.9% year on year, a figure that excludes customs-collected import VAT, consumption tax, tariffs and tonnage tax, and is before deduction of export rebates. Social insurance fee revenue reached RMB 4.5 trillion, and non-tax revenue RMB 1.8 trillion.

Four Trends: Real Economy, Innovation, Quality, Green

Asked about economic highlights visible in tax data, officials described four trends:

Toward the real economy

Industrial enterprise sales revenue grew 7.1% in the first half, with manufacturing up 7.3%. Industry accounted for 36% of all enterprise sales revenue, 2.2 percentage points higher than a year earlier, and industrial equipment investment rose 9.8%.

Toward innovation

Equipment manufacturing, information transmission/software and IT services, and scientific and technological services together represented 23.5% of total enterprise sales revenue, up 2.2 percentage points year on year.

Toward improved quality

Declared profits of 1 million key tax-source enterprises rose 12.8%. Total wages and salaries declared for individual income tax rose 5%.

Toward green development

Sales revenue in ecological protection and environmental governance grew 6.9%, while revenue from clean energy generation, including wind, solar, hydro and nuclear, rose 17.1%.

The National Unified Market: Removing Hidden Barriers

The STA outlined three areas of work to support the national unified market, an effort relevant to founders choosing where to register and how to structure cross-province operations.

• Correcting irregular investment incentives: authorities published a 16-item positive list and a 28-item negative list on compliant invoicing. In the first half of 2026, they pushed provinces and municipalities to repeal or amend 833 documents or agreement clauses related to irregular investment-attraction tax arrangements. Nearly 160,000 enterprises that had registered outside their actual place of operation, partly to obtain irregular rewards or subsidies, moved back; their tax payments in the first half rose 16% year on year.
• Uniform policy application: alongside the Ministry of Finance, the STA moved to standardize more than 80 VAT preferential policies as the VAT Law took effect, and refined income tax rules for corporate restructuring. Eight local governments operating regional tax incentives were asked to define substantive operating standards, backed by joint verification.
• Consistent enforcement: cross-region tax processing was streamlined, with average handling time cut by 5 to 10 days and same-day completion available for eligible cases. Cross-province electronic tax payments exceeded RMB 130 billion, up 39%. A draft 2026 national administrative penalty discretion benchmark was released for public comment, including a list of minor violations not subject to penalties.

Nationwide handling of tax and fee matters reached 1.04 million cross-region transactions in the first half, up 59%, and 24,000 taxpayers completed cross-province relocations. Inter-provincial trade accounted for 41.3% of total sales revenue, 0.6 percentage points higher than a year earlier.

Compliance, Social Security and Credit

The STA reported that in June 2026, 98.5% of corporate taxpayers filed independently within the filing period, 4.5 percentage points higher than at the start of the year. The 2026 tax payment credit evaluation counted more than 47 million creditworthy entities, up 8.6%, including 7.88 million Grade A taxpayers, whose share rose nearly 7 percentage points.

On livelihoods, tax and fee reductions under preferential policies covering pensions, healthcare, education and employment rose 11.8% year on year. Some 126 million people claimed individual income tax special additional deductions for those areas, 5.9% more than a year earlier, with deductions exceeding RMB 320 billion, up 8.2%. A pilot occupational injury protection scheme for new forms of employment was expanded nationwide from 1 July 2026, covering 29.1 million people cumulatively.

For the 15th Five-Year Plan period, the STA said it will pursue law-based tax administration, data-driven governance and stricter internal discipline, implement a "foundation-strengthening" program for tax and fee collection under digital transformation, strengthen compliance management, keep the macro tax burden at a reasonable level and seek clear improvement in taxpayer compliance.

What This Means for Foreign Founders

Several practical points emerge. First, tax authorities are emphasizing uniform policy application and enforcement across regions, which reduces the value of chasing localized incentives and raises the importance of genuine substantive operations where you register. Second, cross-region filing and payment procedures are becoming faster and more standardized, which can simplify managing a China entity from outside the registration city. Third, compliance records matter: credit ratings and independent filing rates are tracked closely, so timely and accurate reporting should be built into your finance routines from day one. Fourth, foreign-invested entities continue to grow in number, and export rebate processing remains an active channel for businesses selling abroad.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

Need help? Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.