China's Copper Scrap Market Moves Towards Compliance with 'Reverse Invoicing' Policy in 2026
In 2025, China began implementing the 'reverse invoicing' policy for the copper scrap industry, focusing on compliance and standardization. By 2026, enforcement will intensify, targeting real operating entities and eliminating shell companies. The policy aims to address missing input invoices and enhance transaction transparency, imposing penalties for non-compliance. As demand for VAT-inclusive copper scrap rises, the market is shifting from subsidy competition to efficiency. Only compliant enterprises will thrive in this evolving landscape.
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The 'reverse invoicing' policy for the copper scrap industry in China began transitional implementation in 2025 and will fully launch in 2026. The National Development and Reform Commission's guidelines prohibit non-compliant local investment promotions and mandate stricter tax authority oversight.
Key requirements include verifying invoicing entities and ensuring actual business premises. Compliance with tax regulations is emphasized, with enterprises needing to maintain standardized purchase records.
As VAT-inclusive copper scrap demand surges, prices have risen, and competition will pivot from subsidies to operational efficiency. Non-compliant businesses are expected to exit the market, leaving only those meeting regulatory standards to participate in the competitive landscape.
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