Understanding Chinese Invoices: Types, Lifecycle, and FinTech Applications

01

Basic Concepts of Invoices

Invoice definition

According to the "Measures for the Administration of Invoices of the People's Republic of China (2023 revision)", an invoice is a receipt issued when goods are sold, services are provided, or other business activities occur, serving as proof of payment.

Invoices include both paper and electronic versions, which have equal legal effect. The government actively promotes electronic invoices; for example, hospitals allow patients to obtain an electronic invoice by scanning a QR code.

The State Tax Administration is responsible for nationwide invoice management, specifying invoice types, copies, content, coding rules, data standards, and usage standards.

Basic copies of an invoice

The standard invoice consists of three copies: stub copy, invoice copy, and accounting copy.

Stub copy is retained by the issuer for record‑keeping.

Invoice copy serves as the original payment voucher for the payer.

Accounting copy is used by the issuer for bookkeeping.

VAT special invoices can be issued in three‑part or six‑part forms. The sixth part is optional and used according to taxpayer needs.

There is also a "deduction copy" used by the buyer to offset input tax; only specialized invoices contain this third copy.

Basic content of invoices

Invoice content includes the invoice name, code, number, copy type, client name, bank account, product name, unit, quantity, unit price, amount (both figures and words), issuer, issue date, issuer unit, and other required fields.

The information can be grouped into four categories: product information, invoice information, buyer information, and seller information.

Invoice lifecycle

An invoice is a physical credential with a complete lifecycle from creation (printing) to destruction.

Key stages include printing, use of nationwide anti‑counterfeit materials, periodic version changes, and regional printing restrictions.

Acquisition: entities or individuals must present registration documents and identification to the tax authority to obtain invoices.

Issuing and custody: false invoicing is prohibited; invoices must bear the official invoice seal, which includes the issuer's name, tax registration number, and the words "invoice special seal".

If a red‑letter invoice is required for returns or discounts, the original invoice must be collected and marked "void" before re‑issuing.

Inspection: tax authorities must present an inspection certificate when conducting checks.

02

Key Concepts of Invoices

After reviewing basic knowledge, we examine specific invoice types and their application scenarios.

Full electronic invoice vs. digital invoice

Full electronic invoice ("全电发票") is provided by the national unified electronic invoice service platform, offering 24‑hour free digital invoicing, delivery, and verification, achieving full digitization of invoicing across all stages.

Digital invoice ("数电发票") converts traditional paper invoices into digital format via email, SMS, or third‑party platforms; it is convenient and environmentally friendly but may face security and legal validity concerns.

Full electronic invoices are fully digital, use electronic signatures, and support automated, intelligent financial management.

Comparison:

Issuing method: digital invoices require manual entry; full electronic invoices can be automatically generated through system integration.

Security and legal effect: digital invoices are vulnerable to tampering; full electronic invoices employ electronic signatures to ensure security and legal validity.

Management: digital invoices rely on third‑party platforms; full electronic invoices enable automatic and intelligent management.

Applicable scenarios: digital invoices suit simple transactions (e.g., online shopping); full electronic invoices are suited for complex B2B transactions and large‑scale purchases.

Regional limits: digital invoices may have regional restrictions; full electronic invoices are nationwide.

Environmental impact: digital invoices reduce paper use but do not eliminate it; full electronic invoices are completely paper‑free.

Multiple invoice systems operate in parallel, such as the VAT invoice management system and the non‑VAT invoice management system.

03

Invoice Classification

Invoices can be broadly classified into "VAT invoices" and "ordinary invoices" (non‑VAT).

Key categories:

VAT invoices: include VAT special invoice (full electronic) and VAT ordinary invoice (full electronic); available in electronic and paper forms; issued via the national unified electronic invoice service platform.

Ordinary invoices: include generic machine‑printed invoices, fixed‑amount invoices, airline ticket itineraries, train tickets, taxi receipts, etc.; issued through non‑VAT invoice management systems.

03

Invoices in FinTech Applications

OCR recognition

General‑format invoices can be accurately recognized by existing OCR technology, which can be directly purchased for fintech workflows.

Third‑party electronic invoice services in China

Companies such as Baiwang and AVIC provide electronic invoice services. A market analysis report ("2020 China Third‑Party Electronic Invoice Industry Market Status and Competitive Landscape") offers detailed insights.

China Securities Depository & Clearing Network – Movable‑property financing registration system

The platform registers and de‑duplicates invoices used as trade proof in credit services, preventing duplicate financing.

Operated by the People's Bank of China, it supports receivable pledge, transfer, leasing, and other movable‑property guarantee methods.

The system helps users understand encumbrances on movable assets, mitigate transaction risk, and provide verification services.

Understanding these concepts is essential for fintech professionals.

04

References

Public account "Basic Knowledge Encyclopedia" – article "Invoice Knowledge Encyclopedia".

Invoice template collection – http://www.taxnote.org/tax/show.php?id=88#gotop

Public account "China Government Online" – article "Do You Know These Small Facts About Invoices?"

All current invoice types in China (2023) – https://zhuanlan.zhihu.com/p/606668349

New type of invoice – 14 full‑electronic invoice styles: 3 issuing regions, 17 receiving regions – https://www.sohu.com/a/567555443_467122

15,000‑word detailed guide on electronic invoice system construction and 15 invoicing scenarios – https://www.toutiao.com/article/7408491214025736716/

Full‑electronic invoice styles – https://www.chinaacc.com/shuishou/zcjd/mu20220727095501.shtml

Comprehensive list of all current invoice types in China – https://zhuanlan.zhihu.com/p/642109130