June 1 Baijiu Consumption Tax Reform: A Watershed Moment for the Industry

The State Taxation Administration issued Announcement No. 9 (2026) on June 1, 2026, adding the Baijiu Consumption Tax Calculation Detail Table and the Baijiu Production Enterprise Associated Sales Unit Information Report Table . These forms shift tax supervision from occasional result sampling to continuous process transparency and data comparison, demanding that every transaction be traceable and every associate be documented.

For baijiu producers, three hard requirements emerge:

Integrate master data and transaction chains across customers, specifications, and both invoiced and uninvoiced sales.

Maintain an auditable associate‑party graph (shareholding, delegation, capital flows) in a system rather than spreadsheets.

Adapt legacy low‑price‑to‑associate‑sales structures, which will raise the taxable base and push channels toward brand‑direct sales, DTC, and flatter distribution.

The two new tables enforce a closed‑loop control:

The Calculation Detail Table requires 15 core data items per transaction, including customer, product specification, sales quantity (both invoiced and uninvoiced), ex‑factory price, and tax‑calculated price.

The Associated Sales Unit Report captures six fields for each associate (name, shareholding ratio, relationship duration, etc.) and mandates immediate updates and permanent retention of any changes.

Both tables together create a regulatory loop where price, associate, and data can be cross‑checked, dramatically improving tax precision and deterrence.

The core tax rule, known as the "60% higher principle," states that when a baijiu producer sells to an associated unit without a pre‑determined minimum tax price, the taxable price is the higher of the weighted average ex‑factory price and 60% of the associate's terminal selling price. If a minimum tax price has been set, the higher of the ex‑factory price and that minimum applies.

Example: a producer sells a bottle for ¥300 to an associate, while the associate’s terminal price is ¥1,000. Sixty percent of ¥1,000 is ¥600, which exceeds the ex‑factory price, so the taxable price becomes ¥600, raising the tax base compared with previous low‑price reporting.

Reporting periods start in June 2026 for monthly filers and July 2026 for quarterly filers.

Industry experts note that while some firms will face short‑term pressure, the reform drives long‑term benefits: higher compliance, brand‑centric growth, and a more orderly market that curbs price wars and tax evasion.

Overall, the 2026 baijiu consumption tax reform marks a watershed, ushering the sector into a phase of compliance, brand consolidation, and quality‑driven competition.