Guide to Deductible Expenses Without Invoices for 2026 Corporate Income Tax

1. The Old Habit of Recording Expenses Without Invoices

In the International Trade City, purchasing goods without invoices, or only receiving receipts in Huangyuan Market, and renting stalls from individuals—these are daily realities for business owners in Yiwu. Can these expenses be deducted before corporate income tax without compliant invoices?

Since the launch of the Golden Tax Phase IV in 2020 and the full promotion of electronic invoices in 2026, the tax system has become increasingly precise in identifying 'expenses recorded without invoices.' According to Announcement No. 17 of 2021 and Announcement No. 28 of 2018 of the State Taxation Administration, tax-deductible vouchers must be genuine, legal, and valid. Relying solely on handwritten receipts, WeChat transfer screenshots, or verbal agreements is no longer acceptable.

Business owners in Yiwu, do not assume that 'it has always been done this way'—in 2026, the Zhejiang Provincial Tax Bureau will focus on expenses recorded without invoices and no-invoice expenditures as key inspection items. Today, Jinfan Tax & Finance will thoroughly address this issue.

2. Which Expenditures Must Have Invoices?

According to Announcement of the State Taxation Administration on Issuing the Measures for the Management of Pre-Tax Deduction Vouchers for Enterprise Income Tax (Announcement No. 28 of 2018 of the State Taxation Administration) (国家税务总局公告2018年第28号), pre-tax deduction vouchers are divided into internal and external vouchers. External vouchers include invoices, fiscal receipts, tax payment certificates, and receipt vouchers, among others.

2.1 Situations Requiring Invoices

• Purchasing goods or services from VAT taxpayers who have registered for tax purposes—for example, buying from a regular manufacturer or purchasing office supplies from a mall, amounts ≥500 yuan should generally be supported by an invoice
• VAT taxable projects—where the counterparty is a business entity and the transaction falls within the scope of VAT taxation
• Transactions between enterprises—company-to-company or company-to-individual business, must issue invoices

2.2 Situations Not Requiring Invoices

• Small and sporadic business operations—where the counterparty is a unit that does not need to register for tax purposes or an individual engaged in small and sporadic business operations, the expenditure can be supported by a receipt voucher and internal voucher. The standard for 'small and sporadic' is: a single transaction amount not exceeding 500 yuan (VAT threshold), and the counterparty has not registered for tax purposes
• The counterparty cannot issue an invoice—for example, if the counterparty has been deregistered, revoked, had its business license canceled, or is recognized as an abnormal taxpayer by the tax authority, the expenditure can be supported by relevant proof materials and internal vouchers
• Domestic non-VAT taxable projects—such as payments to individuals for breach of contract or compensation (non-VAT taxable behavior), can be supported by receipt vouchers and internal vouchers

Let's calculate: You purchased a batch of goods from an individual in Beixiazhu, Yiwu, for 380 yuan, and the individual has no business license or tax registration. This is considered a small and sporadic transaction, and no invoice is required, but you should ask the individual to provide a receipt voucher—including their name, ID number, amount received, item, and date. Additionally, you should withhold individual income tax at a rate of 20% (applicable withholding rate). If you do not withhold the tax, it may be deemed non-compliant.

3. How to Handle Stall Fees and Market Rent in the Trade City?

This is a typical issue in Yiwu. Many business owners rent stalls in the Trade City or Yiwu Purchase, where the landlord is either an individual or a market operation company. There are two scenarios:

3.1 Renting Stalls from Individual Landlords

Individual landlords renting real estate (stalls, warehouses, housing) can go to the tax bureau to issue a VAT invoice on behalf of the landlord. For individual rental of residential property, the VAT rate is 1.5%, and for non-residential property (shops, stalls), the VAT rate is 5%.

What if many landlords in Yiwu are unwilling to issue invoices?

• Contract stipulates 'invoice provided by the lessor'—specify this in the lease agreement; otherwise, you can request the landlord to issue an invoice, which is their legal obligation
• If it is truly impossible to issue an invoice—you can use the lease agreement, transfer records, and a copy of the landlord's ID card, in accordance with Article 9 of Announcement No. 28 of 2018 of the State Taxation Administration, as a situation where it is impossible to reissue or replace the invoice
• Note—relying solely on the contract and transfer records may not be recognized by the tax authority. It is recommended to at least go to the tax bureau once a year to issue an invoice on behalf of the landlord, even if you bear the tax cost. A few hundred yuan in tax per year can save tens of thousands of yuan in deductions, making it worthwhile

4. Five Common Misconceptions About Corporate Expense Deductions

4.1 'Receipts Can Replace Invoices'

Except for small and sporadic transactions and other special cases, receipts cannot replace invoices. With the full promotion of electronic invoices in 2026, the tax system can verify the authenticity of invoices in seconds—a fake or non-compliant invoice will be automatically identified and flagged as a warning.

4.2 'Without an Invoice, Pay More Tax'

Wrong! Without a compliant voucher, this expenditure must be adjusted for tax purposes during the annual tax reconciliation. If discovered during an audit, it may be considered fabricating false tax bases, resulting in a fine of up to 50,000 yuan (Article 64 of the Tax Collection and Administration Law). You pay more tax, but the fine is calculated separately.

4.3 'WeChat Transfer Screenshots Are Vouchers'

WeChat and Alipay transfer records are evidence of fund transfers, but they are not legal pre-tax deduction vouchers. They only prove that you made a payment, not the nature of the transaction or the authenticity of the amount. Additional supporting documents such as contracts and delivery notes are required.

4.4 'After the Annual Tax Reconciliation Period, Invoices Cannot Be Supplemented'

This is incorrect. According to Article 13 of Announcement No. 28 of 2018 of the State Taxation Administration, if the tax authority discovers that you have not obtained a compliant voucher after the annual tax reconciliation period and informs you, you have 60 days from the date of notification to supplement or replace the compliant invoice, or provide proof that it is impossible to do so. Therefore, even after the annual tax reconciliation period, there is still an opportunity to remedy the situation.

4.5 'All Invoices Issued by Individuals Require Withholding Tax'

Only labor remuneration requires withholding and remitting individual income tax. If it is business income (e.g., the individual is a registered individual business owner), the individual reports and pays the tax themselves, and you do not need to withhold. The key is to distinguish between labor remuneration and business income—if an individual provides a one-time service, has no fixed place of business, and no employees, it is generally labor remuneration; if they have a fixed place of business and engage in regular business activities, it is business income.

5. Q&A: Frequently Asked Questions

Q1: What if the seller in the Trade City refuses to issue an invoice?

You can request the seller to issue an invoice. If they refuse, you can report them to the tax authority (12366). As the buyer, you have the right to request an invoice, and the seller's refusal is a violation of the invoice management regulations.

Q2: How to reimburse accommodation expenses if an employee does not have an invoice while on a business trip?

For employee business trips, an invoice is generally required for accommodation expenses. However, for small and sporadic expenditures (single transaction not exceeding 500 yuan), the expense can be supported by a receipt voucher + employee's expense reimbursement form. Note: travel expenses, such as air tickets and train tickets, must be supported by invoices or legal vouchers.

Q3: The company bought used equipment from an individual who did not issue an invoice?

When an individual sells their own used items (including used equipment), VAT is exempt. You can ask the individual to go to the tax bureau to issue a general VAT invoice, with a note stating 'sale of personal used equipment, VAT exempt.' The VAT rate for the sale of used items by individuals is exempt.

Q4: Can the rent for a village collective house be recorded without an invoice?

A village collective economic organization is a unit that does not need to register for tax purposes, and its receipt voucher (stamped with the village committee seal) can be a legal pre-tax deduction voucher. However, it is recommended to also attach the lease agreement and payment voucher. The specific basis is Article 9 of Announcement No. 28 of 2018 of the State Taxation Administration.

Q5: Can WeChat QR code payment records replace invoices?

No. WeChat payment records are only proof of fund transfers and cannot replace legal and valid pre-tax deduction vouchers. To deduct the expense for income tax purposes, additional supporting documents such as contracts and a receipt issued by the counterparty (noting the nature of the transaction, amount, date, and the counterparty's name and ID number) are required. If the single transaction exceeds 500 yuan, an invoice should generally be obtained.

6. Sources and References

1. Announcement of the State Taxation Administration on Issuing the Measures for the Management of Pre-Tax Deduction Vouchers for Enterprise Income Tax (Announcement No. 28 of 2018 of the State Taxation Administration) (国家税务总局公告2018年第28号)
2. Announcement of the State Taxation Administration on Several Policy and Administration Issues Concerning Enterprise Income Tax (Announcement No. 17 of 2021 of the State Taxation Administration) (国家税务总局公告2021年第17号)
3. Tax Collection and Administration Law of the People's Republic of China (Article 64) (中华人民共和国税收征收管理法（第六十四条）)
4. Invoice Management Regulations of the People's Republic of China (2023 Revision) (中华人民共和国发票管理办法（2023年修订）)
5. Announcement of the Ministry of Finance and the State Taxation Administration on Clarifying Policies for Reducing VAT for Small-Scale VAT Taxpayers and Other Policies (Announcement No. 1 of 2023 of the Ministry of Finance and the State Taxation Administration) (财政部 税务总局公告2023年第1号)
6. Announcement No. 17 of 2021 of the State Taxation Administration - Several Policy and Administration Issues Concerning Enterprise Income Tax
7. Official Website of the State Taxation Administration
8. Official Website of the Zhejiang Provincial Tax Bureau

7. Reminders from Jinfan Tax & Finance

Business owners in Yiwu, invoices are not a panacea, but without invoices, your business is at risk. Every expenditure without a compliant voucher is a potential tax risk for your business.

Jinfan Tax & Finance's Recommendations:

• Establish an invoice management system: Purchases over 500 yuan must be supported by an invoice, and purchases over 5,000 yuan must be supported by a VAT special invoice (if the counterparty is a general taxpayer)
• Proactively issue invoices on behalf of individual landlords: A few hundred yuan in tax per year can save tens of thousands or even hundreds of thousands of yuan in deductions
• For small purchases, ensure you have the receipt + contract + payment record trio
• Conduct a year-end review of no-invoice expenditures and promptly supplement any missing invoices
• Regularly consult with professional tax and finance institutions—Jinfan Tax & Finance (10 years of expertise in Yiwu) to ensure tax compliance

As your business grows, tax compliance is a fundamental requirement. Do not let a single invoice ruin a deal, nor let a single receipt trigger an audit.

👇 Need help with tax compliance checks? Contact Jinfan Tax & Finance

Jinfan (Yiwu) Finance & Tax Management Co., Ltd. | 10 Years of Focus on SME Tax and Finance Services in Yiwu
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