Export VAT Refund in China

by bvs.w Taxation and audit report

To promote the export of goods, in China there is no VAT applicable to exported goods. When a company sources/buys products from the supplier, the supplier VAT invoice (Fapiao) includes VAT (input VAT). Normally, the input VAT could be deducted from the output VAT, but for exported goods there is no output VAT. Therefore, the government has set up a system for the refund of export-related VAT. Companies can claim back the input VAT paid for export goods through the monthly export VAT refund claim.

Who is eligible for export VAT refund?

Generally, to be eligible for export VAT refund, the export enterprise must:

  • Be a general VAT taxpayer;
  • Have a legitimate business address;
  • Be duly registered for tax purposes;
  • Hold import and export rights;
  • Have a business scope that includes import and export activities;
  • Carries out normal foreign exchange transaction and settlement activities;
  • Fulfills its social insurance obligations towards its employees;
  • Hold special permits if exporting certain products, such as vehicles, lubricants, and paraffin wax;
  • Have completed the necessary record-filing procedures for export tax rebate.

Which industries are eligible for VAT rebates?

As stipulated in the STA Announcement (2022), the VAT rebate policy has been extended to include all eligible companies in the following six industries:

  • Manufacturing and trading
  • Scientific R&D and technology services
  • Electricity, heating, gas, and water production and supply
  • Software and information technology services
  • Ecological protection and environmental governance
  • Transport, logistics, warehousing, and postal

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

Value Added Tax (VAT) in China