New reverse invoicing rule for renewable resources integrating 'three flows' takes effect July 1; minimum individual income tax prepayment for natural persons at 0.25%

Published: Jun 30, 2026 09:27

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From July 1, 2026, the new policy on reverse invoicing with unification of the three flows for the renewable resources industry will be officially implemented. The new regulation requires recycling enterprises, when purchasing scrap from individual sellers, to complete the entire transaction process through compliant online systems, achieving unification of the three flows—funds, invoices, and goods—and enabling the purchaser to issue purchase invoices in reverse. The prepayment of individual income tax for natural persons selling scrap will be significantly reduced: for annual sales of up to 600,000 yuan, the rate will be only 0.25%; the excess portion will be taxed at 0.5%. After adopting this compliant model, recycling enterprises will no longer need to maintain additional purchase ledgers or handle tax filings for individual sellers. The purchase invoices issued can be used as cost vouchers for VAT deduction and pre-tax deduction of corporate income tax. Meanwhile, individual sellers are reminded to complete the annual settlement of business income tax before March 31 of the following year. This policy aims to address the risk of issuing fraudulent invoices in the industry, regulate renewable resource transactions, and simultaneously reduce compliance operating costs across the entire industry chain.

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