VAT tax refund policy

VAT tax refund policy

When an overseas traveler leaves the country from the departure port, he or she can receive the refund of value-added tax on items purchased at tax refund shops.

Who can apply

Foreign/Hong Kong/Macao/Taiwan travelers staying in Chinese mainland for no more than 183 days consecutively qualify for the tax refund policy.

Regions

Beijing, Shanghai, Tianjin, Xiamen, Liaoning province, Anhui province, Fujian province, Sichuan province, Hainan province and Hebei province.

Hainan province officially implemented the pilot program for overseas travelers' tax refund policy since January 1, 2011;

Starting from July 1, 2015, Beijing and Shanghai took the lead in implementing the tax refund policy for overseas travelers. The tax refund can be processed at Beijing Capital International Airport and Shanghai Hongqiao Airport;

Tianjin, Liaoning province, Anhui province, Fujian province, Xiamen and Sichuan province have implemented the tax refund policy for overseas travelers since January 1, 2016;

Hebei province has officially implemented the overseas travelers' tax refund policy since May 1, 2018. Overseas travelers can enjoy tax refund policy at 46 stores including Jiangxuan Trading Co Ltd of Anxin county and Tianyi Commercial Building Co Ltd in Xiong county of Xiong'an New District, Hebei province.

Scope of tax refund items

A total of 324 kinds in 21 categories including clothing, shoes and hats, cosmetics, watches, jewelry, electrical appliances, healthcare and beauty equipment, kitchen equipment, bathroom appliances, furniture, air conditioners, refrigerators, laundry equipment, televisions, photography equipment, computers, bicycles, stationery and sporting goods are eligible for the tax refund policy.

Food, beverages, fruits, tobacco, alcohol, cars and motorcycles are not eligible for tax refund. For details, please refer to: (1) items in the List of Items Prohibited and Restricted from Import and Export of the People's Republic of China; (2) items subject to the VAT tax free policy in tax refund shops; (3) other items as stipulated by the Ministry of Finance, General Administration of Customs and State Administration of Taxation.

Requirements

The amount of purchase made by one overseas traveler in one tax free store in one day should be over 500 yuan ($72.73);

The good purchased have not been used or consumed;

The time period between the date of departure and the date of purchase should not exceed 90 days;

The goods claimed for VAT refund will be carried by overseas travelers or transported with their luggage.

Procedures

There are four steps including applications for tax refunds, Customs verification, tax refund paid by an agency and centralized settlement of tax refunds. Overseas travelers only need to follow the first three steps.

1）If an overseas traveler purchases a tax refund item at a tax refund shop and claims the tax refund before leaving China, he/she should request the Application Form for Departure Tax Refund with his/her valid ID and the VAT invoice (issued by the upgraded VAT invoice system) for the tax refund items.

2）The traveler shall submit the goods, valid ID, the VAT invoice of the tax refund item and the Application Form for Departure Tax Refund to China Customs for verification.

3）When the tax refund agency receives an application for departure tax refund from overseas travelers, it shall first collect the valid ID information of the traveler applying for the departure tax refund. The tax refund shall be handled in accordance with the confirmation opinion of the Customs if the following requirements are met:

a. The information on the departure tax refund application is complete;

b. The information of the overseas traveler in the Application Form for Departure Tax Refund is consistent with that on his/her valid ID.

c. The Application Form for Departure Tax Refund shall be verified and sealed by the Customs;

d. The departure date of the overseas traveler does not exceed 183 days from the last entry date;

e. The time period between leaving date and purchasing date does not exceed 90 days;

f. The information on the Application Form for Departure Tax Refund is consistent with that in the departure tax refund management system.

VAT refund amount

The refund rate is 11 percent of the invoice value.

Refunds = Invoice value (VAT included) × Rebate rate (11 percent)

However, 2 percent of the rebates are charged by the rebate agency as service fee. Therefore, visitors actually enjoy a rebate rate of 9 percent.

Actual refunds = Invoice value (VAT included) × Rebate Rate (9 percent)

Currency

The tax refund currency is RMB. There are two tax refund methods: cash rebate and bank transfer. If the tax refund amount exceeds 10,000 yuan, the tax refund agency shall refund the tax through bank transfer. If the amount of tax refund does not exceed 10,000 yuan, the tax refund agency may use either cash rebate or bank transfer to refund the tax according to the choice of overseas travelers.