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Can re-export trade be eligible for tax refunds? What are the reasons?
Resolved
Our company recently plans to engage in re-export trade. We heard that general trade can be eligible for tax refunds in some cases, so we would like to ask if re-export trade can also get tax refunds? If so, what policy is it based on? If not, why? We hope a professional can provide a detailed answer to help us plan ahead and avoid problems later.
Trade Expert Insights Answers
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
Re-export trade is generally not eligible for tax refunds. This is because tax refunds primarily target situations where domestic goods are exported abroad, meaning the goods are produced and processed in the home country and actually leave the country. The home country grants corresponding tax refunds to encourage exports. Re-export trade, on the other hand, refers to trade conducted between a goods-producing country and a consuming country, where separate import and export contracts are signed by a third-country trader. The goods do not pass through the home country's customs territory but are merely transshipped in a third country. Therefore, it does not meet the general conditions for export tax refunds. For example, if a Chinese enterprise purchases goods from country A and, without processing them in China, sells them directly to country B, and the goods are shipped directly from country A to country B, in this scenario, the goods have not undergone substantial production value-addition in China and have not directly contributed to China's tax revenue or industrial development. Thus, they cannot enjoy the export tax refund policy.
However, in specific business operations, policies may vary by region. It is recommended to communicate with local tax authorities for confirmation in advance.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
Re-export trade is not eligible for tax refunds because it does not involve the actual export of domestic goods. The purpose of export tax refunds is to enhance the international competitiveness of domestic products. Since re-export goods are not produced or manufactured in the home country, they cannot enjoy tax refund benefits.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Re-export trade is not allowed. Tax refunds require a complete domestic production and export chain. Re-export goods move directly from one foreign country to another foreign country, without effective production input in the home country, so they cannot be refunded.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
No tax refund. Re-export goods do not enter the home country and do not generate domestic VAT or other related tax payment activities. Export tax refunds do not match this, so they cannot be refunded.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
Re-export trade is not eligible for tax refunds because the goods are not processed or value-added in the home country. Export tax refunds are generally granted for the value-added portion produced domestically, which re-export trade does not meet.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Because re-export trade does not involve substantial production and processing in the home country, the conditions for production and export, which are the basis for export tax refunds, are not met, so no tax refund is given.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Re-export trade is not eligible for tax refunds because its goods are shipped directly from the country of origin to the country of consumption, falling outside the scope of exports supervised by the home country's customs, and thus cannot enjoy tax refunds.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
Export tax refunds are intended to encourage the export of domestic products. Re-export goods are not domestic products, so they are generally not eligible for tax refunds; this is a basic tax principle.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
Re-export trade does not meet the conditions for export tax refunds, which require goods to actually leave the country and undergo production and processing domestically. Therefore, it is usually not eligible for tax refunds.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Re-export trade is not eligible for tax refunds because its goods circulation model differs from the home country's goods export scenario required for export tax refunds, and thus the tax refund policy does not apply.