We recommend learning about China’s organized export fee and refund policies, as well as other financial services in China. The following article discusses export tax rebates, custom duties, and more.
China’s Export Fees and Refunds
Export tax rebate
Tax return in China can include export tax. This applies to refunds of indirect taxes that are paid by exporters during the production and distribution processes.
VAT rebate
Generally speaking, VAT on export is exempt in China, and if indirect taxes are imposed on exporters, they are eligible for a tax rebate. Indeed, most exported goods are subject to this relief, yet, in some categories the amount of refunded tax would be less than the amount of tax paid.
It is worth mentioning that VAT exemption and China VAT refund policies are available for general taxpayers only (companies that generate an annual revenue greater than 5,000,000 RMB).
Since March 2020, as China showed first signals of economic recovery amid COVID-19, the Chinese authorities increased the rate of VAT refund in China for 1464 products, for the benefit of exporters.
According to the new regulation:
- Nearly 75% of the total 1464 items are subject to 13% export VAT rebate. These include, among others, stainless steel, sanitary ware, etc.
/ - The rest 25% of items are subject to 9% export VAT rebate.
Consumption tax rebate
Exported goods are also exempt from consumption tax. Normally, for exported goods that are VAT exempt, the consumption tax is exempt too. Also, consumption tax is refundable for exported goods that were previously imported into China.
It should be reminded that this regulation applies to exported goods only, and is irrelevant for goods that are sold domestically.
The tax rebate procedure
In order to enjoy tax rebate policies, exporters should provide Chinese authorities with several documents:
- Business license in China
- Export approval documentation
- Monthly tax declaration
- Customs declaration
- VAT declaration form
- And more
The application for a certain year’s rebate must be submitted by April 30th of the following year. The whole process upon application submission until tax is refunded lasts between 2-3 months.
Also, please remember that similarly to other national policies, both tax rebate policies of production and trade enterprises, and compliance requirements vary across China and across industries.
Custom duties – exportation
Custom duties are also levied on exported items, but are rarer in China. Export duties are imposed on a limited number of resources and semi manufactures products (around a 108 in total).
Calculation:
The basis of either the import or the export duty is the products’ DPV (Duty Paid Value).
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Last updated: Apr 2024
