Employee Expense Reimbursement in China: When Do You Need a Fapiao?

For most business purchases from registered suppliers in China, an employee should get a compliant fapiao made out to the company that is buying. Some expenses use other documents, such as an invoice from a supplier abroad. And a reimbursement is not the same thing as an allowance: the documents and the nature of the payment are checked separately.

This guide is for employers setting up or tidying an expense process for staff in mainland China.

What a fapiao is, and what doesn’t count

A fapiao (发票) is an invoice governed by China’s invoice rules. Organisations, and individuals doing business, are expected to get one from the payee when they buy goods or services (Invoice Management Measures, Article 19). A fapiao that doesn’t meet the rules can’t be used as a voucher for reimbursement, and anyone may refuse it (Article 20).

Electronic and paper fapiao have the same legal effect (Article 3). Since 1 December 2024, the fully digital e-fapiao (数电发票) has been in use nationwide, with the same effect as paper (STA Announcement 2024 No. 11).

A shop receipt, a WeChat or Alipay payment record, or a bank statement shows that money was paid. It isn’t a fapiao. These records can still back up a claim, but they don’t replace the invoice where one is required.

The fapiao should name the company that is actually buying. When the buyer is a company, it has to give the seller its taxpayer ID or unified social credit code, and a general VAT fapiao without it can’t be used as a tax voucher (STA Announcement 2017 No. 16). So tell employees the company’s exact name and code before they spend, not after.

Train and plane travel

Domestic rail and air travel now has its own electronic invoices. The rail e-invoice, 电子发票（铁路电子客票）, started on 1 November 2024 (Announcement 2024 No. 8). The air e-itinerary, 电子发票（航空运输电子客票行程单）, started on 1 December 2024 (Announcement 2024 No. 9).

Both carry the passenger’s identity information and buyer information. The traveller’s details appear automatically; the buyer fields take the company’s name and unified social credit code, which the traveller enters when requesting the invoice. If only personal details are entered, the company can’t use the invoice for its VAT input credit (Jiangsu Tax Bureau, July 2026). Wrong buyer details are fixed with a red-letter correction and a reissued invoice (Announcement 2024 No. 8, Article 8). For flights, the traveller can also reimburse on another valid invoice instead of the e-itinerary.

Five questions every claim raises

An expense claim answers five separate questions, and one answer doesn’t settle the others:

1. Can the company reimburse it?
2. Is the document valid accounting evidence?
3. Can the company deduct it for corporate income tax?
4. Can the company credit the VAT?
5. Is any of it the employee’s taxable income?

The finance team owns questions 2 to 4. This guide concentrates on 1 and 5, because they decide the policy you give employees and what goes through payroll.

Reimbursement or allowance

Reimbursing a cost the employee paid on the company’s behalf is different from paying them a fixed amount every month. Allowances and subsidies are part of wages and salaries for individual income tax (IIT Implementing Regulations, Article 6), so a regular meal, transport or phone allowance normally goes through payroll and is taxed.

Two narrow exceptions exist. Travel allowances (差旅费津贴) and missed-meal subsidies (误餐补助) are listed as not wages and not taxed (国税发〔1994〕89号). The missed-meal exemption only covers staff working on official business who can’t eat at their workplace or go back to eat, paid per actual missed meal at the prescribed standard. Money paid to staff generally under that name is taxable wages (财税字〔1995〕82号). The label on a payment doesn’t decide its treatment.

Phone and transport subsidies paid under a communications or official-vehicle reform are taxed as wages after a business-expense deduction set locally (国税发〔1999〕58号, section II). The treatment depends on where the employee is based.

Having a fapiao doesn’t settle the question either. A fapiao supports an expense; it doesn’t show that the cost belonged to the company rather than being a personal benefit or disguised pay. The practical choice: an allowance is simpler to run but is taxed through payroll, while a reimbursement needs evidence for each claim and, for a genuine business cost, isn’t pay.

Common expenses

For purchases from abroad, the company’s tax deduction rests on the overseas supplier’s invoice or an invoice-like receipt, plus any related tax payment documents (STA Announcement 2018 No. 28, Article 11). Applying that to an employee’s genuine business hotel or taxi abroad is the general rule at work, not a separate ruling for those expenses.

What finance checks

• Buyer details match the purchasing company’s name and code.
• The item and amount match the business purpose and the approval.
• Authenticity. Fully digital e-fapiao can be checked free through the e-invoice service platform or the national VAT invoice verification platform (Announcement 2024 No. 11, Article 11). A genuine invoice can still be a duplicate, or later reversed.
• Duplicates. An electronic file can be submitted twice. Match the invoice number, claimant, amount and purpose against earlier claims, and look for any reversal or refund.
• The electronic original. If a printout of an e-fapiao is used for reimbursement, bookkeeping or archiving, the electronic file it came from must also be kept (财会〔2020〕6号, Article 4). A printout or screenshot alone isn’t enough.
• Invalid fapiao. Forged, altered or wrongly completed fapiao can’t support the company’s tax deduction (Announcement 2018 No. 28, Article 12).

Missing or wrong fapiao

Wrong details. Ask the issuer to follow the red-letter correction procedure and issue a correct replacement. For fully digital e-fapiao, the issuer can correct it directly if the buyer hasn’t yet confirmed or booked it; otherwise both sides confirm a red-letter information form first (Announcement 2024 No. 11, Article 8). Never edit the invoice file.

Lost. An e-fapiao can often be downloaded again or resent by the issuer, depending on how it was issued.

Missing. Send it to finance to assess the evidence available, get a replacement where possible, and decide the accounting and tax treatment. Don’t assume the payment automatically becomes wages, or that calling it a reimbursement removes any tax consequence.

A simple reimbursement workflow

1. Give employees the purchasing company’s name and code before they travel or spend.
2. The employee submits the e-fapiao or e-invoice with the business purpose.
3. A manager approves.
4. Finance checks the details, authenticity and duplicates.
5. The company pays. A separate run from salary keeps reimbursements and pay apart, which is a useful control rather than a legal requirement.
6. The electronic originals are archived.

Any allowances go through payroll instead.

How NNRoad supports this

Under China Employer of Record, NNRoad reimburses employees’ business expenses separately from their salary. Expense handling is charged as an additional service fee based on the number of fapiao processed, and any special arrangement is agreed before it starts. For companies with their own China entity, China payroll runs allowances through payroll and withholding. Talk to us about your reimbursement policy and how expenses will be handled under the employment arrangement you choose.

FAQ

Are paper train and plane tickets still accepted?

Only the old paper rail reimbursement vouchers and paper air itineraries for journeys on or before 30 September 2025. Later trips need the rail e-invoice or air e-itinerary (Announcements 2024 No. 8 and No. 9).