Starting 8 August 2025, a 6% VAT will apply to interest income from newly issued treasury, local government, and financial bonds.
China’s Ministry of Finance and State Taxation Administration issued Announcement No. 4 of 2025 on 31 July 2025, introducing VAT on bond interest income.
Starting 8 August 2025, interest income from newly issued treasury bonds, local government bonds, and financial bonds will be subject to a 6% VAT. Bonds issued before this date will remain VAT-exempt until maturity.
Previously, bond interest income was exempt from business tax in the 1990s, which was replaced by VAT in 2016.
