Hunan's First "ThreeFlow" Reverse Invoice Makes History — Vary Tech and Zhuzhou Resources Partner to Break New Ground in Recycling Compliance

Published on:2026-07-24

Recently — Hunan Province's first-ever reverse purchase invoice for recyclable resources was officially issued today at the Zhuzhou Tianyuan District Green Sorting Center for Recyclable Resources. The milestone invoice was generated through an integrated online platform connected to the electronic tax bureau, in a joint effort by the Vary Tech Resource Recycling Group and its joint-venture partner, Zhuzhou Resource Investment Recyclable Resources Comprehensive Utilization Co., Ltd. — a partnership between Vary Tech and the state-owned Zhuzhou Resource Investment Group.


 
This is not just a piece of paper. It marks the first time Hunan's "reverse invoicing" policy has moved from regulatory design to real—world industrial practice — and the first successful deployment of the "Three—Flow Integration" reverse—invoicing model on a state-owned recycling platform.
 

The Compliance Bottleneck That Held Back an Industry


For decades, the lack of source invoices has been the single biggest compliance headache for China's recyclable—resource industry.
 
When recycling companies purchase scrap materials from individual sellers, they have historically been unable to obtain VAT input-tax deduction certificates or proper documentation for corporate-income-tax deductions. This has driven up operating costs, created hidden tax-compliance risks, and seriously slowed the industry's move toward standardisation and formalisation.
 
The breakthrough came in April 2024, when the State Taxation Administration issued Announcement [2024] No. 5 — Matters Concerning "Reverse Invoicing" by Resource Recycling Enterprises to Individual Sellers of Scrap Products. Effective from 29 April 2024, qualified recycling enterprises were officially permitted to issue invoices to individual sellers.
 
But the policy alone was not enough. Real-world challenges — verifying transaction authenticity, managing compliance costs across the full workflow — made it difficult for most recyclers to actually implement reverse invoicing on their own.


2026: Policy Accelerates — and So Does the Solution


Further policy tailwinds arrived in 2026. Under State Taxation Administration Announcement [2026] No. 12, effective 1 July 2026, individual sellers who supply scrap products to recycling enterprises through the "Three-Flow Integration Reverse Invoicing" model now pay a reduced provisional individual-income-tax rate of just 0.25% on the portion of annual sales up to RMB 600,000.
 
The "Three-Flow Integration" model works by embedding tax rules directly into the online payment platform — achieving full alignment of the invoice flow, goods flow and capital flow. The operating principle: invoice upon payment, tax upon invoicing, revenue upon tax payment. For the recycling industry, this has pressed the "fast-forward" button on formalisation and compliance.


Vary Tech's Answer: A Digital Compliance Engine Built for Real-World Recycling


As a core enterprise in China's circular economy and a nationally designated key recyclable-resource company, the Vary Tech Resource Recycling Group brings more than 20 years of industry experience — backed by a full-chain infrastructure spanning front-end collection networks, mid-stream resource processing and back-end digital enablement.
 
Leveraging this deep industrial know-how and digital capabilities, Vary Tech has built a fully compliant reverse-invoicing solution structured around a "Transaction, Service, Supervision" three-in-one framework. It integrates three core digital pillars:
 
Transaction matching — connecting buyers and sellers
SaaS-based management — digitising workflow and compliance
Cloud-based certified evidence storage — securing every step
 
The system covers the entire transaction lifecycle: contract signing, quality inspection and goods receipt, settlement and reconciliation, direct-connected invoicing and online payment. More than just "three flows," it creates a full-chain, auditable evidence system spanning five integrated flows: contract, materials, capital, invoice and information.


 
The platform is already connected to UnionPay and Alipay — ensuring transaction authenticity and compliance at the most fundamental level. The result: documented transactions, traceable processes, solid compliance grounds, and accessible supervision — all built into one seamless digital workflow.


The System in Action: How It Works


Recycling enterprises are invited to onboard via the electronic tax bureau through the payment platform. Vary Tech can develop customised interfaces and precise function integrations to meet each client's specific operational needs.
 
Once onboarded, enterprises can issue compliant "Three-Flow" reverse invoices intelligently and automatically at the point of online payment. The entire process is online, standardised and fully traceable — and now, with Hunan's first compliant reverse invoice as a live proof point, enterprises have a clear, replicable pathway to align with the new regulatory regime and avoid tax-related risks.


A Benchmark for State-Owned Platform Collaboration — and a Replicable Model for the Industry


This landmark project with Zhuzhou Resource Investment Group represents the first implementation of Vary Tech's solution on a state-owned recyclable-resource platform. It is also a benchmark case of how industrial capability and public investment can join forces to empower an entire sector — delivering twoway value creation across both the industrial and financial dimensions.
 
For recyclers across China, this offers a proven, replicable "Vary Tech Model" for compliant operation, cost reduction and efficiency improvement — all while staying fully aligned with the latest policy requirements.

Looking Ahead: Scaling the Solution, Driving Industry-Wide Transformation

Vary Tech Resource Recycling Group will continue to refine and evolve its reverse-invoicing products, promote mature digital compliance solutions across the broader recycling industry, and help more enterprises capture the full benefits of policy reform.
 
Our goal is clear: to drive the formalisation and high-quality growth of the circular economy — not as a theoretical idea, but as a practical, scalable, working reality.
 
Want to learn how the "Vary Tech Model" can work for your business?
Contact us to explore how our Three-Flow Integration reverse-invoicing solution can help you cut compliance costs, reduce tax risk, and operate with full regulatory confidence — just as we have done for Hunan's first landmark transaction.

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