China export tax rebate may be one of the inevitable benefits for a trading WFOE or manufacturing company in China. Export tax rebate refers the value-added tax and consumption tax paid by the exported goods to the actual production and circulation segment in China, which is the refunds of indirect taxes paid by exporting enterprises in the production and distribution process. The export tax rebate is mainly through the refund of export goods of domestic tax paid to balance the tax burden of domestic products, making their products to exclude tax costs to enter the international market to enhance competitiveness.
VAT Rates in China
China VAT rate has been changed from four tiers to three tiers in 2017, in other words, 13% tax rate has been removed from the tax rate of 17%, 13%, 11% and 6%. In addition, the VAT rate in manufacturing industry will be further cut to 16% starting from May 1, 2018.
The most immediate effect of the simplified reform on China VAT rates is to lower taxes for taxpayers. Preliminary estimates show that the reform will benefit 25,000 taxpayers in Guangzhou mainly in the wholesale and retail business field.
The changes in China VAT rates not only benefits the enterprises by reducing tax burden but also effectively enhance the enterprise's ability to further expand reproduction by liquidizing the cash flow.
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Conditions on VAT Refund Application
The applicant must be an enterprise with the right to self-export and self-VAT refund, which refers to enterprises approved by the relevant departments and owns the right to import and export, In which, enterprises mainly refers to the foreign trade companies and manufacturing enterprises, including Foreign-Invested Enterprises (FIEs).
Enterprises must hold the legal business license, which is the proof that enterprise or organization has the legal rights to operate business inside China, and must have independent accounting with a separate business bank account to handle the purchase and sale of foreign business and payment.
Consumption Tax Rebates
For export goods, no consumption tax is payable. If the exported goods were previously imported into China, the consumption tax paid upon import is also refundable. For goods that are VAT exempt, consumption tax is generally also exempt. However, previously paid consumption tax is neither refundable nor creditable from consumption tax payable for domestically sold goods.
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If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 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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