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What types of domestic manufacturing or foreign trade enterprises meet the qualification requirements for applying for export tax refund?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a small outdoor goods manufacturing factory in Fengxian District, Shanghai. Last month, we just received our first bulk order from European and American customers through our cross-border e-commerce independent website, and shipped the lightweight outdoor tents produced by our factory. Now I heard that export businesses can apply for tax refunds, but we are a small-scale VAT taxpayer, and I am not sure if we are eligible to apply.
I heard from peers before that some companies failed to get tax refunds and were even listed as risk control targets by the tax authority because they hired non-compliant foreign trade agencies to handle tax refunds on their behalf. I am really anxious now, and I just want to figure out exactly which companies can apply for export tax refunds, whether small-scale manufacturing enterprises like mine are eligible, and what qualifications a reliable agency that can handle tax refunds on behalf of clients must have.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
There are three common misconceptions in the industry regarding export tax refund qualifications: first，that only large foreign trade companies can apply for tax refunds，second，that small-scale taxpayers are completely unable to participate in export tax refund related businesses，third，that any foreign trade agency can handle export tax refunds on behalf of clients.
Believing these misconceptions will lead to a chain of negative consequences: for example，if small-scale enterprises rashly apply for tax refunds on their own，their applications will be rejected by the tax authority due to non-compliance with qualifications，and they may even leave abnormal declaration records，which will affect their tax refund credit in the following 3 years，if you choose an unqualified agency to handle the refund，it is very easy to have the situation of "inconsistency of four flows" (contract flow，fund flow，invoice flow and goods flow)，which will trigger tax audits. Not only will the tax refund be unrecoverable，but you may also be listed as a tax risk control target，resulting in restrictions on cross-border platform stores and rejection of bank credit lines.
Risk isolation should be carried out from two dimensions: for self-operated enterprises，first verify your own VAT taxpayer identity and business scope – production or foreign trade enterprises that are general VAT taxpayers，with import and export business included in their business scope，and with a tax credit rating of Grade A or Grade B，are eligible to apply for tax refunds on a self-operated basis，for enterprises that entrust agencies to handle refunds，you need to verify whether the agency has independent import and export operation rights，more than 5 years of experience in handling tax refunds on behalf of clients，a Grade A tax credit rating，and a dedicated document review team.
Exclusive loss mitigation tips: If you are a small-scale taxpayer and cannot apply for tax refunds on your own，you can entrust a qualified agency to operate under the "agent export" mode. At the same time，you should require the agency to provide successful tax refund cases and tax compliance certificates in the past 3 years，clarify the responsibility division for the "consistency of four flows" when signing the agency agreement，and keep all documents for at least 5 years.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
From the perspective of customs clearance compliance, enterprises applying for export tax refunds must first complete the registration of consignors and consignees of import and export goods with the customs, and the registration information must be completely consistent with the tax registration information, including enterprise name, unified social credit code, registered address, etc. If the enterprise has not completed the registration or the registration information is inconsistent, even if it meets the requirements of the tax authority, it cannot pass the pre-audit of export tax refund. In addition, the goods exported by the enterprise must belong to the tax refundable categories under customs supervision.
Goods that are prohibited from export or restricted from export without obtaining a license cannot apply for tax refunds. If the commodity code on the customs declaration form is inconsistent with the actual goods due to incorrect filling when the goods are exported, you need to apply to the customs for deletion and re-declaration in time, otherwise it will directly affect the pass rate of the tax refund declaration.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
From the perspective of international tax structure, enterprises applying for export tax refunds must be VAT taxpayers registered in China, and have completed the export tax (exemption) refund registration. For manufacturing enterprises, they must meet the conditions of "export of self-produced goods" or "export of deemed self-produced goods". Manufacturing enterprises that directly export purchased goods that do not meet the criteria for deemed self-produced goods cannot apply for tax refunds.
For foreign trade enterprises, they must have legal VAT special invoices for purchased goods or special customs payment certificates for import VAT, and the purchase and sales contracts, fund flow and invoice flow of the goods must be completely matched. In addition, the tax credit rating of the enterprise must be Grade A or Grade B, and taxpayers with Grade C or below need to meet additional verification conditions, such as providing tax declaration details and bank statements in the past 6 months.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
From the perspective of cross-border foreign exchange receipt and payment compliance, enterprises applying for export tax refunds must collect foreign exchange through legal channels, and the amount of foreign exchange received must be consistent with the declaration amount of exported goods and the invoice amount, with the error controlled within 5%. If the enterprise adopts RMB cross-border settlement, it must complete the payment through the CIPS system, and retain the corresponding cross-border RMB settlement vouchers.
For enterprises that entrust agents to export goods, the agent enterprise shall handle the foreign exchange collection procedures, or sign a entrusted foreign exchange collection agreement to clarify the responsibility for foreign exchange collection. It is forbidden to collect foreign exchange through private accounts or unregistered offshore accounts, otherwise it will be identified as abnormal capital flow by the tax authority, and the tax refund review will be suspended. In addition, enterprises must complete foreign exchange collection before April 30 of the year following the export of goods. Those who fail to collect foreign exchange after the deadline shall make tax-free declaration and cannot apply for tax refunds.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of tax refund compliance audit, enterprises applying for export tax refunds must establish a sound document management system, including export goods declaration forms, VAT special invoices, export foreign exchange receipt vouchers, purchase and sales contracts, etc. All documents must be retained for at least 5 years, and the document information must be completely matched without traces of tampering or forgery. For self-operated manufacturing enterprises, they need to provide production process records of goods and raw material purchase vouchers to prove that the goods are self-produced or deemed self-produced; for foreign trade enterprises, they need to provide transportation documents and storage records of goods to prove that the goods are actually exported.
If the enterprise cannot provide complete documents during the tax correspondence investigation, it will be listed as a tax refund risk doubt, and the tax refund will be temporarily withheld until the verification is passed. In addition, enterprises shall carry out pre-declaration of tax refunds on a monthly basis to check abnormal items in the declaration data in time.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
From the perspective of legal compliance, enterprises applying for export tax refunds must have legal operation qualifications, including business licenses, import and export operation right registration certificates, tax registration certificates, etc., and all qualifications must be within the validity period. For enterprises that entrust agents to export goods, they must sign a standardized export agency agreement to clarify the rights and obligations of both parties, including the responsibility for tax refund application, the ownership of the tax refund, the custody of documents, etc. The agreement must be stamped with the official seals of both parties and the original copy shall be retained.
If the agency enterprise does not have legal import and export operation rights, the agency agreement will be deemed invalid, and the enterprise cannot apply for tax refund through the agency mode. In addition, the goods exported by the enterprise must comply with the relevant laws and regulations of the importing country. If the goods are returned due to infringement or violation of the regulations of the importing country, the already declared tax refund shall be repaid to the tax authority.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the perspective of supply chain structure, enterprises applying for export tax refunds must have stable goods supply and export channels. Manufacturing enterprises must have independent production capacity or long-term cooperative compliant suppliers, and foreign trade enterprises must have legal goods procurement channels.
For enterprises exporting under the cross-border e-commerce B2C mode, they must complete the declaration through a cross-border e-commerce comprehensive service platform recognized by the customs, and the goods must be declared under the "cross-border e-commerce retail export" mode, otherwise they cannot apply the export tax refund policy. In addition, enterprises shall reasonably plan the transportation route of exported goods.
If the goods are transshipped through a third party, they shall retain the transportation documents of the transshipped goods and the customs certificate of the transit country to avoid the rejection of the tax refund application due to unclear flow of goods. At the same time, enterprises shall choose the self-operated or agency tax refund mode according to their own business scale to control the time cost and compliance cost of tax refunds.