VAT Tax Refund

VAT tax refund policies

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

Who can apply

Overseas travelers, including those from Hong Kong, Macao and Taiwan, who stay on the Chinese mainland for no more than 183 consecutive days are eligible for a tax refund. Purchases must be made within 90 days of the traveler’s departure date. Tax-refundable items must be personally carried by the traveler or checked in as accompanied luggage when leaving the country.

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 pioneered the implementation of tax refund policies for overseas travelers. Tax refunds can be processed at Beijing Capital International Airport, Shanghai Pudong Airport, and Shanghai Hongqiao Airport. Both Beijing Capital International Airport and Beijing Daxing International Airport utilize the "We TaxFree Pass" mini-program for tax refund processing.

Tianjin, Liaoning province, Anhui province, Fujian province, Xiamen and Sichuan province have implemented the tax refund policies for overseas travelers since Jan1, 2016;

Hebei province has officially implemented the overseas travelers' tax refund policies since May 1, 2018. Overseas travelers can get tax refunds at Shijiazhuang Zhengding International Airport, Qinhuangdao Beidaihe Airport, Qinhuangdao Port, and 46 local stores including Jiangxuan Trading Co in Anxin county and Tianyi Commercial Building Co in Xiong county, Xiong'an New District.

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 ($69);

The goods 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 personally carried by the 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 present his/her valid ID and the VAT invoice for the tax refund items (issued by the upgraded VAT invoice system) to the tax refund store to request the Application Form for Departure Tax Refund.

2）Upon departure at airport or port, 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 VAT refund is based on the total invoice amount (including VAT) of goods eligible for refund at the time of departure. For goods subject to a 13-percent VAT rate, the refund rate is 11 percent; for goods subject to a 9-percent VAT rate, the refund rate is 8 percent.

The calculation formula for refundable VAT is as follows:
Gross refunds = Invoice value (VAT included) × Rebate rate
Actual refunds = Gross refunds - Service fee charged by the refund agent

Currency

The tax refund currency is yuan. 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. When an overseas traveler collects or arranges to collect the tax refund, they must sign to confirm the "Overseas Traveler Shopping Departure Tax Refund Receipt".