Do You Know the Many Nuances of Handling Export Tax Rebates?

For companies engaged in import and export business, export tax rebates are undoubtedly a significant policy benefit. Simply put, export tax rebate refers to the refund of Value-Added Tax and Consumption Tax paid in the domestic production and circulation stages, as stipulated by tax laws, for goods declared for export from China in international trade. This policy aims to encourage enterprises to export and enhance the competitiveness of Chinese goods in the international market. Imagine Mr. Du, who runs a foreign trade company. Through export tax rebates, her product costs are reduced, giving her products a more advantageous price in the international market, and consequently, her order volume increases.

Which Enterprises Can Handle Export Tax Rebates?

Generally, several types of enterprises meet the conditions for handling export tax rebates. Firstly, enterprises with foreign trade export operation rights that undertake national export foreign exchange earning tasks, and central and local foreign trade enterprises, industrial and trade companies, and some industrial manufacturing enterprises that have been approved by economic and trade authorities and enjoy independent export operation rights. Secondly, entrusted export enterprises, mainly referring to enterprises that entrust enterprises with export operation rights to act as agents for exports and bear export profits and losses. For example, Mr. Du factory, although it does not have export operation rights itself, has entrusted a qualified foreign trade company to export its products. In this case, Mr. Du factory may also be eligible for export tax rebates.

What Conditions Are Required for Handling Export Tax Rebates?

For goods to be eligible for export tax rebates, they must meet certain conditions. Firstly, the goods must be within the scope of Value-Added Tax and Consumption Tax collection. The scope of collection for these two types of taxes includes all VAT taxable goods, except for tax-exempt agricultural products purchased directly from agricultural producers, as well as 11 categories of consumer goods subject to consumption tax, such as tobacco, alcohol, and cosmetics. Secondly, the goods must have been declared for export and have left the country. "Export" means to ship out of the customs territory, which includes both self-managed export and entrusted agency export. Determining whether goods have been declared for export and have left the country is one of the main criteria for identifying whether goods fall within the scope of tax rebates. Thirdly, the goods must have been accounted for as export sales in the financial statements. Export goods can only be processed for tax rebates after being treated as export sales in financial statements. Fourthly, the goods must have been paid for in foreign exchange and verified. According to current regulations, export goods for which export enterprises apply for tax rebates must have been paid for in foreign exchange and verified by foreign exchange administration departments.

Process for Handling Export Tax Rebates

The first step is tax rebate certification. After obtaining import and export operation rights, enterprises should go to the local tax authority responsible for tax rebates within 30 days to handle the export goods tax rebate (exemption) certification. They should fill out the export goods tax rebate (exemption) certification form. The second step is customs declaration for export. Enterprises should declare goods for export in accordance with relevant regulations and obtain relevant documents such as the export goods customs declaration form. The third step is foreign exchange collection and verification. Enterprises should collect foreign exchange within the prescribed time and go to the foreign exchange administration department to complete the verification procedures. The fourth step is tax rebate declaration. After collecting all relevant documents, enterprises should declare for export tax rebates to the responsible tax authority within the prescribed declaration period. The fifth step is review and approval. The responsible tax authority will review the enterprise's tax rebate declaration. Upon passing the review, it will be approved according to the prescribed procedures. The sixth step is tax refund. After approval, the tax authority will refund the tax amount to the enterprise.

Points to Note When Handling Export Tax Rebates

There are many points to note during the process of handling export tax rebates. On one hand, attention should be paid to the declaration period. Enterprises should, within the VAT tax declaration periods from the month following the date of customs declaration for export of goods up to April 30 of the following year, collect all relevant certificates and declare for export goods VAT and consumption tax exemption/rebates to the competent tax authority. On the other hand, the authenticity and completeness of the declared information must be ensured. For instance, documents such as the export goods customs declaration form and special VAT invoices must be genuine and valid, and filled out accurately. Otherwise, enterprises may face penalties from the tax authorities and affect their tax rebate applications.

The export tax rebate policy provides opportunities for enterprise development. As long as enterprises are familiar with the handling process, meet the relevant conditions, and pay attention to various details, they can smoothly enjoy this policy dividend and take more solid steps in the international market. We hope that all enterprise operators will attach importance to handling export tax rebates, reasonably utilize policies, and enhance enterprise competitiveness.