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China Export Tax Rebate

China export tax rebates or China export tax refunds (export rebates or export exemption) refer to the refund of export products, domestic production and circulation in the actual payment of the product tax, value added tax, business tax and special consumption tax. Export tax rebate system is an important part of national revenue. Mainly through the refund of export tax rebate exports to balance domestic taxes already paid the tax burden on domestic products, so that the cost of their products not included into the international market and foreign products to compete under the same conditions, thereby enhancing competitiveness and expand exports foreign exchange.

Goods Scope Applicable to Export Tax Rebate (Exemption)

The goods scope applicable to export tax rebate (exemption) in China primarily refer to:
1.  Goods subject to value added tax and consumption tax, including all the VAT taxable goods (excluding those tax-free agricultural products that directly purchased from the farmers, as well as 11 categories of consumer goods such as tobacco, alcohol, cosmetics, etc. the Export Tax Rebate (Exemption) shall only be carried out on the goods that have already been levied VAT and consumption tax or shall only exempt the assessment paid and the amount liable to tax. And for the Goods that have not been levied value-added tax and consumption tax , goods (including duty-free goods prescribed by the State ) are not entitled to a tax rebate, which fully embodies the principle of “ Tax Rebate shall not be granted to the goods from which the tax have not been levied.”

2. Goods that are declared at China’s customs for export. The export consists of self-support export and principal-agent exports. One of the major criteria deciding whether or not the goods belong to the categories of tax refund (exemption) is to check whether the goods are declared at China’s custom for export. For domestic sales that are not subject to the export declaration, if not otherwise stipulated, shall not be regarded as export goods and therefore shall not be refunded no matter how the export enterprise make the payment or how they manage their financial matters. For the goods that are sold domestically and charged with foreign goods, such as those that sell at the Hotels and Restaurant, they shall not be be regarded as export goods and therefore shall not be refunded.

3. Goods that must financially go through export sales. Only after this the tax of the goods could be refunded (exempted). That is to say, the principle of the Export tax refund (exemption) applies only to goods for the export trade, other than non-tradable export goods, such as donations of gifts, or domestic personal purchase that comes with the people when leaving the country (except as otherwise specified), samples, exhibits, mailings, etc. as these goods are not subject to the sales procedure they cannot be can not ne refunded (exempted).

4. Goods that have been collected and have been written-off. In accordance with existing regulations, the goods that export enterprises shall apply for a refund (exemption) must be goods that received foreign exchange and written off by the foreign exchange administrative departments. The State stipulates that those goods must fall into the above mentioned 4 categories: for manufacturing enterprises (including manufacturing enterprises with the right to operate import and export, enterprises commissioning the foreign trade enterprises to conduct export, and foreign-invested enterprises, same as below), an additional condition must be added when applying for export tax rebate (exemption ), that is, the goods that export enterprises shall apply for a refund (exemption) must be self-produced ones or regarded as self-produced ones.

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