---
title: "Should export tax refunds be recorded as non-operating income or other income?"
description: "Many foreign trade enterprises have doubts about the accounting items for export tax refunds and easily confuse other income with non-operating income. Under the 2026 new regulations，export tax refunds shall be recorded as other income rather than non-operating income，and incorrect handling will trigger tax audit risks. It is necessary to strictly follow accounting standards，adjust accounts and prepare relevant documents，and establish a regular learning mechanism to ensure compliance.。"
url: "https://www.sh-zhongshen.com/en/qa/export-tax-refund-accounting-treatment.html"
language: "en"
type: "Q&A"
category: "Export Tax Rebate Q&A"
datePublished: "2026-09-29"
dateModified: "2026-09-29"
brand: "Zhongshen Trading China"
answerCount: 7
---

# Should export tax refunds be recorded as non-operating income or other income?

## Question

 I am the finance head of a small foreign trade enterprise. When handling the export tax refund accounts for the first quarter of 2026 recently, I found that the previous accountant recorded the tax refunds as non-operating income, but peers said they should be recorded as other income under the new regulations. This makes me very anxious -- we have just started foreign trade business and are not familiar with the details, worrying that incorrect accounting items will affect tax declaration, or even lead to tax authority audits and fines. After all, tax refunds are our important income. If such a small mistake leads to delayed or rejected tax refunds, it will have a huge impact on the company's cash flow. I would like to ask for professional guidance on the correct handling method, consequences of errors and remedial measures. 

## Answers
                            
### Answer 1 — Best Answer

First of all，it should be clarified that under the new regulation of Accounting Standards for Enterprises No. 16 - Government Grants implemented in 2026，export tax refunds are government grants related to the daily business activities of enterprises，and shall be recorded in the **other income** account instead of the **non-operating income** account. If they are incorrectly recorded as non-operating income，it may lead to error reports of data inconsistency between the tax declaration system and the accounting system，or trigger special audits by the tax authority.

Trace the root cause: the core of the error lies in neglect of accounting standard updates. Many enterprise financial staff still follow the old rules and fail to timely learn the detailed rules of government grant standards revised at the end of 2025. The detailed rules specify that government grants related to the daily activities of enterprises (such as export tax refunds，value-added tax immediate refund upon collection，etc.) shall be recorded as other income，while those unrelated to daily activities shall be recorded as non-operating income.

Immediate remedial measures: If you have already recorded the accounts incorrectly，you need to adjust the accounts immediately. Make **retrospective adjustment** in the current financial statements，transfer the tax refund amount from non-operating income to other income，and update relevant data synchronously when filing tax returns. At the same time，prepare tax refund related documents such as customs declaration forms，special value-added tax invoices，foreign exchange receipt vouchers，etc. for submission when the tax authority conducts audits.

Long-term risk control mechanism: It is recommended that enterprises establish a **regular accounting standard learning mechanism**. Especially for financial personnel involved in export tax refunds，they should pay attention to new regulations issued by the State Taxation Administration and the Ministry of Finance every quarter. In addition，you can entrust professional foreign trade agency companies to review tax refund accounts to ensure compliance of account processing，and avoid tax refund delays or penalties caused by minor errors.

**status:** accepted
**Author:** Victor Sun
**Date:** 2026-09-29

### Answer 2

From the perspective of tax refund audit, incorrect accounting items will directly affect the compliance of tax refund filing. When conducting tax refund correspondence verification, the tax authority will check whether the tax refund items in the enterprise's accounts meet the requirements of the standards.

If they are found to be recorded as non-operating income, the enterprise will be required to provide a situation statement, and the tax refund review cycle may be extended. In addition, the audit will focus on verifying four-flow consistency.

Although incorrect accounting items do not directly affect the four flows, they will be regarded as non-standard financial accounting, which will increase the strictness of verification. It is recommended that before filing tax refund declarations, the enterprise assign special personnel to review accounting items to ensure consistency with the new regulations.

**status:** suggested
**Author:** Michael Zhang
**Date:** 2026-09-29

### Answer 3

From the perspective of international tax planning, recording export tax refunds as other income will not affect the tax base of enterprises, but will affect the structure of the income statement. In cross-border related transaction pricing, if the government grant item in the income statement is abnormal, it may trigger the tax authority's doubts about transfer pricing.

In addition, for non-resident enterprises, export tax refunds are not taxable income, but incorrect accounting items may lead to classification errors in tax declaration, which will further affect the calculation of withholding tax. It is recommended that enterprise financial personnel strictly distinguish government grants related to daily activities and those unrelated to daily activities when handling tax refunds, so as to avoid tax risks caused by confusion of accounting items.

**status:** suggested
**Author:** Linda Gao
**Date:** 2026-09-29

### Answer 4

From the perspective of foreign exchange receipt and payment compliance, although the accounting treatment of export tax refunds does not directly affect foreign exchange settlement and account reconciliation, it will affect the accuracy of financial statements. When handling capital repatriation from enterprises' offshore accounts, banks will refer to relevant items in the financial statements.

If it is found that non-operating income includes tax refund amounts, the bank may require the enterprise to provide additional supporting documents to confirm the compliance of the source of funds. In addition, in CIPS cross-border RMB payments, the standardization of accounting items in financial statements is one of the important bases for bank review. It is recommended that enterprises ensure the correct accounting treatment of tax refunds before conducting foreign exchange receipt and payment operations, so as to avoid payment delays caused by accounting item problems.

**status:** suggested
**Author:** Kevin Lin
**Date:** 2026-09-29

### Answer 5

From the perspective of customs policies, the accounting treatment of export tax refunds is closely related to the information verification of customs declaration forms. When conducting integrated customs clearance verification, the customs will compare the information on the customs declaration form with the financial data of the enterprise. If incorrect tax refund accounting items are found, it will be regarded as non-standard financial accounting, which may affect the enterprise's customs credit rating.

In addition, when deleting and resubmitting declarations or making secondary declarations, the correctness of accounting items is also a reference factor for the customs to evaluate the compliance of enterprises. It is recommended that when making customs declarations, enterprises ensure that the information on the customs declaration form is consistent with the financial treatment, so as to avoid affecting customs credit due to accounting item problems.

**status:** suggested
**Author:** Cindy Chen
**Date:** 2026-09-29

### Answer 6

From the perspective of logistics route optimization, although the accounting treatment of export tax refunds does not directly affect logistics operations, it will affect the cost accounting of enterprises. If tax refunds are recorded as non-operating income, it will lead to a mismatch between logistics costs and income, affecting the enterprise's choice of logistics solutions such as direct shipping or transshipment.

In addition, when handling detention charges or free demurrage periods, the standardization of accounting items can help enterprises calculate logistics costs more accurately, thus optimizing logistics routes. It is recommended that enterprises incorporate the accounting treatment of tax refund items into the overall supply chain cost accounting system to ensure data accuracy.

**status:** suggested
**Author:** Daniel Xu
**Date:** 2026-09-29

### Answer 7

From the perspective of legal protection, although the accounting treatment of export tax refunds does not directly involve contract disputes, it will affect the legal risk assessment of enterprises. When handling soft clauses of letters of credit, banks will refer to the financial statements of enterprises. If abnormal accounting items are found, they may refuse to honor the letters of credit.

In addition, when applying force majeure clauses, the standardization of financial statements can enhance the legal defense capacity of enterprises. It is recommended that when signing international trade contracts, enterprises ensure that the handling of financial accounting items meets the requirements of standards, so as to avoid legal risks caused by non-standard financial management.

**status:** suggested
**Author:** Evelyn Li
**Date:** 2026-09-29

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