Tax refund in China may also refer to tax rebate. Taxes are classified into two main categories: direct and indirect taxes. Direct taxes are known as taxes that are directly levied on an individual or entity—for example, income tax or taxes on assets. While indirect taxes are levied on services and goods rather than income or profits, e.g. VAT or sales tax.
Your China-based company may be eligible for a tax rebate. Certain taxes can be avoided by corporations by filing rebates. However, it is easier to file for refunds on indirect taxes like, VAT, than direct taxes. Once you’ve filled the rebate form and provided the required documents, the refundable amount will be returned by the government.
New Rebate Rates
According to the State Council’s announcement, export tax rebates will be increased to 16 percent for goods that currently enjoy a 15 percent rate, as well as for certain ones that currently hold a 13 percent rate.
Goods that presently have a nine percent rate will be raised to either 10 or 13 percent, and goods at the five percent rate will be lifted to either six or 10 percent.
Who Can Apply for Tax Refund in China?
Whether you’re a Wholly Foreign Owned Enterprise, a Joint Venture or a Representative Office operating within China, you can easily apply for tax refund. However, the reimbursement of your taxes will depend on the nature of your product and the type of tax paid.
How to Get Tax Refund？
In order to be eligible for tax refund, you need to register as a tax-paying entity. Once you’ve received your business license from the government, apply as a tax rebate qualifier with the local tax department. Various declaration forms and supporting documents like, export license, will be required for completion of this process.
Clearly disclose all your taxable income, assets, and properties, along with tax exemption you’re eligible for. You need to prove to the government that you’ve paid taxes on service, goods, and exports, which can be reimbursed by the government.
In addition to this, some sectors and business types are given preferential refund rates. For example, tax levied on the purchase of new equipment for factory can be fully reimbursed in certain sectors and provinces.
Tax refunds can be received within 3–6 months, but for timely recovery, you need to file for these rebates in the beginning of financial year. It’s your job to know, whether your business is eligible for tax rebates or preferential treatment. We can help you with the tax registration and China Company registration process.
Along with providing assistance in the registration and incorporation of China company in the forms of WFOE, RO, JV, FIPE, etc, Tannet also offers premium accounting and company management services to all our clients.
Contact us
If you have further inquiries, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Shenzhen hotline at 86-755-82143512 or Hong Kong hotline at 852-27826888, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu, Shenzhen, China.
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