Connect & Solve
Trade Q&A
Which Part of Tax Is Refunded Under the Current Export Tax Refund Policy? Is There Any Difference Between Manufacturing and Foreign Trade Enterprises?
or complex compliance issues.
clearance and fund security.
I am the owner of a small foreign trade company engaged in home goods export in Shanghai. I have been in the industry for half a year, and we completed our first full container load shipment to Germany last month. Now my finance staff is preparing export tax refund declaration materials, and told me that the refund refers to the input VAT paid when purchasing goods.
But I am a bit confused: I heard from peers that some can also get consumption tax refund, and the tax refund rule for my friend's manufacturing export enterprise seems different from mine. I have gone through relevant policies these days but feel more confused. I am afraid that wrong declaration of my finance staff will affect the arrival of tax refund, after all, the profit of this order is already thin, and tax refund accounts for nearly 30% of the revenue.
If anything goes wrong, I will not only fail to get the money, but also may face inspection, so I am very anxious. I want to figure out which part of tax is covered by export tax refund, whether there are differences for different types of enterprises, and whether other taxes are involved.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
First of all，common industry misconceptions shall be clarified: many foreign trade enterprises mistakenly believe that export tax refund covers output tax in the export link，or all input tax is eligible for refund. Such cognitive bias will directly lead to non-conforming declaration materials，trigger verification inquiries from tax authorities，delay the arrival of tax refund，and even lead to inclusion in the abnormal tax credit list in severe cases，affecting customs clearance and declaration of subsequent export business.
The scope of tax refund is clearly defined for different types of enterprises: foreign trade enterprises get refund of input VAT paid in the goods purchase link. If the exported goods fall into the scope of consumption tax taxable items，the consumption tax paid in the production link can also be refunded. Manufacturing export enterprises apply the "exemption，credit and refund" policy，and the refund covers input VAT corresponding to raw materials，spare parts and other items consumed in the production process of self-produced goods，while output tax in the export link is exempted.
Physical risk isolation measures: when purchasing goods，enterprises shall require suppliers to issue compliant special VAT invoices，and mark the purpose of goods as "for export only" to avoid confusion with input tax of domestic sales goods. Exclusive loss-stopping tip: 7 days before declaration，verify the scope of tax refund through the pre-declaration function of the electronic tax bureau. If any doubt arises，adjust the declaration data in time to ensure passing the review at one time.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The scope of export tax refund is directly bound with the declaration content of the customs declaration form, covering the input VAT paid in domestic purchase or production links of the corresponding declared export goods (part of which includes consumption tax). When declaring, it is necessary to ensure that the commodity code, goods name and quantity are completely consistent with those on the input invoice.
If the goods marked on the customs declaration form are "samples" or "gifts" and not declared as "general trade export" according to the trade mode, the input tax of corresponding goods cannot be applied for refund. In addition, if the "tax refund declaration" mark is not checked accurately during customs declaration, customs data cannot be synchronized to the tax system, which will directly lead to no matching basis for tax refund declaration and delay the process.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Export tax refund covers the input VAT paid in the purchase or production link of the goods themselves, and input tax generated from logistics expenses is not included in the refund scope. For example, input VAT corresponding to international ocean freight, port charges, storage fees and other items can only be used for domestic sales deduction, and cannot be applied for export tax refund.
If goods are returned due to quality problems, the approved tax refund shall be fully paid back to the tax authority. When making the repayment, materials such as return customs declaration form and original tax refund certificate shall be provided. If the repayment is not made in time, late fee will be incurred, and the priority of tax refund review for subsequent export goods will also be affected.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The core of export tax refund is to return input VAT paid in domestic purchase or production links, and corresponding consumption tax can be refunded for some goods involving consumption tax, which is essentially different from the cross-border VAT deferment policy: VAT deferment refers to delaying the payment of VAT in the importing country, rather than refunding domestic taxes. If an enterprise has cross-border related transactions, it shall ensure that the pricing of related transactions complies with the arm's length principle.
If the pricing is too low leading to the FOB price on the export customs declaration form lower than the reasonable range, the tax authority will lower the tax refund calculation base and reduce the refund amount. In addition, the "exemption, credit and refund" amount of manufacturing enterprises shall be deducted against the domestic sales tax payable to avoid double tax refund.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Export tax refund covers input VAT (part of which includes consumption tax) corresponding to export goods that have completed foreign exchange receipt (or deemed foreign exchange receipt). Compliance of foreign exchange receipt and payment is the precondition for tax refund. Enterprises shall ensure that the source of received foreign exchange is consistent with the buyer specified in the export contract.
If foreign exchange is collected through a third-party account, a proof of authorized foreign exchange collection shall be provided, otherwise the tax authority will determine that the capital flow is inconsistent and reject the tax refund application. In addition, if foreign exchange is not received within 12 months after goods export, and no proof materials of deemed foreign exchange receipt are submitted to the tax authority, the already declared tax refund will be recovered, and the tax refund credit rating of the enterprise will also be affected.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Export tax refund covers input VAT paid in domestic purchase or production links of goods exported in accordance with contract provisions, and contract terms are an important basis for tax refund compliance. If the contract does not specify that the goods are "for export only", or the goods are subsequently changed from domestic sales to export, a supplementary export agreement shall be signed, otherwise the tax authority may determine that the goods do not meet the tax refund conditions.
In addition, if goods cannot be exported due to force majeure, the paid input tax can be applied for domestic sales deduction, and there is no need to apply for tax refund. If tax refund has been declared, the declaration shall be withdrawn in time to avoid tax risks caused by failure of actual goods export.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Export tax refund covers input VAT corresponding to compliant goods confirmed to be exported through customs inspection, and on-site inspection results directly affect tax refund qualification. If the inspection finds that the actual name and specification of goods are inconsistent with those on the customs declaration form, or the goods are converted from domestic sales to export and not declared in accordance with regulations, the customs will mark "inspection abnormality".
After the data is synchronized to the tax system, the tax refund application for corresponding goods will be rejected. In addition, if broken seals or domestic sales marks are found on goods during inspection, a situation explanation shall be submitted to the customs in time to supplement export compliance certificates, otherwise not only tax refund will be unavailable, but also administrative penalties may be imposed.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Export tax refund covers input VAT of exported goods and their bound packaging materials, and input tax of independent packaging consumables is not included in the refund scope. For example, if the UN packaging of dangerous goods is special packaging exported together with the goods, its input tax can be included in the tax refund scope; while input tax corresponding to disposable wooden pallets, containers and other recyclable packaging can only be used for domestic sales deduction.
In addition, the MSDS report and dangerous goods packaging certificate of packaging materials shall match the commodity code of the goods. If packaging documents are inconsistent with goods information, the tax authority will determine that the compliance of goods is doubtful and suspend the tax refund review.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
Export tax refund covers input VAT corresponding to export goods with consistency of four streams, namely contract flow, invoice flow, goods flow and capital flow. The consistency of four streams is the core audit standard. If the seller on the input invoice is inconsistent with the seller specified in the contract, or the capital flow comes from a non-contract buyer, it will be directly determined as non-compliant during audit, and the tax refund application will be rejected.
In addition, when declaring across months, input tax of domestic sales and export goods shall be divided accurately. If input tax of domestic sales goods is mixed into export tax refund declaration, it will trigger tax verification inquiry, and fines will be imposed in severe cases, affecting the credit rating of the enterprise.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
Export tax refund covers input VAT paid in domestic purchase or production links of export goods, and the tax refund base is directly related to trade terms: under FOB terms, the FOB price is taken as the calculation base; under CIF terms, freight and insurance premium shall be deducted to get the base. In supply chain planning, export goods and domestic sales goods shall be managed separately.
If mixed storage leads to inability to accurately divide input tax, the tax authority will verify the refundable input tax amount according to the sales proportion, which may lead to the enterprise being unable to enjoy full tax refund benefits. In addition, planning the procurement cycle in advance to ensure that input invoices are issued before export can avoid affecting the tax refund declaration limitation due to delayed invoices.