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What Does the Export Tax Refund Investigation and Evaluation Process Specifically Refer to? What Key Audit Nodes Does It Include?
or complex compliance issues.
clearance and fund security.
I am the head of a small enterprise in Shanghai focusing on precision hardware export. Recently, I handled a single export tax refund of over 500,000 RMB for the first time. Yesterday I suddenly received a notice from the tax authority saying that our application has entered the investigation and evaluation process.
I panicked immediately and my palms were sweating. What does this mean exactly? Is there something wrong with our customs declaration form or input invoices? I heard from peers before that some enterprises were stuck in this process for more than two months before getting the tax refund.
Our company's capital chain is already tight now, and downstream suppliers are pressing for payment. If the tax refund is delayed for too long, we definitely can't hold on. Moreover, I have no idea what materials I need to provide for cooperation, what precautions there are in this process, and whether it will trigger fines or affect our subsequent tax refund qualification?
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The export tax refund investigation and evaluation process is a verification node set up by tax authorities to verify the authenticity and compliance of export tax refund applications. It is not only targeted at enterprises with violations，routine verification will also be launched for scenarios such as first large-value tax refund application of enterprises and newly established enterprises.
In the pre-document review stage，enterprises need to ensure "four flows consistency"，that is，the information of contract flow，capital flow，goods flow and invoice flow is fully matched. In particular，the commodity name and specification of input invoices shall be consistent with those on the customs declaration form. If there is a difference in product name，an explanation letter shall be prepared in advance.
When connecting core nodes，tax authorities will verify the authenticity of transactions through methods such as system comparison and letter investigation to supplying enterprises. Enterprises shall cooperate to provide supporting materials such as bills of lading，packing lists and foreign exchange receipts within 3 working days，to avoid audit upgrade caused by overdue submission.
If there is an abnormality，such as doubtful feedback from letter investigation，you shall sort out the full-process transaction vouchers as soon as possible，submit a detailed business description to the tax authority，and entrust a professional agency to assist in communication when necessary. Finally，you shall ensure that all materials are kept for reference for at least 5 years to complete compliance implementation.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The accuracy of customs declaration information directly affects the audit efficiency of the export tax refund investigation and evaluation process. If the commodity code on the customs declaration form is inconsistent with the commodity tariff heading of the input invoice, or the transaction method is declared incorrectly (such as declaring FOB as CIF), it will trigger key verification by the tax authority. Enterprises shall ensure that the commodity name, specification model, quantity and unit price on the customs declaration form are fully consistent with those on the contract and invoice.
If the code is changed due to customs classification adjustment, you shall submit the classification confirmation letter issued by the customs to the tax authority in time, to avoid being identified as suspicious transaction due to inconsistent information. In addition, the export date, transportation method and other information on the customs declaration form shall be consistent with those on the bill of lading, otherwise it will be regarded as insufficient evidence of goods flow and delay the tax refund progress.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
In the export tax refund investigation and evaluation process, tax authorities will focus on verifying the compliance of the enterprise's tax structure. If the enterprise adopts the VAT deferred declaration method, it shall ensure the logical consistency between the deferred application materials and the tax refund application materials, for example, the scope of deferred goods shall be fully consistent with the export goods applying for tax refund, and the sales amount declared for deferral shall correspond to the sales amount declared for tax refund.
If the enterprise has cross-border related transactions, it shall prepare a related transaction pricing explanation to prove that the transaction price conforms to the arm's length principle, to avoid being identified as transferring profits and defrauding tax refunds. In addition, enterprises shall ensure the compliance of input tax deduction, and shall not mix the input tax of non-export goods into the tax refund application, otherwise it will trigger the upgrade of investigation and evaluation, and even face the risk of paying back taxes.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
In the export tax refund investigation and evaluation process, the integrity of document filing is one of the core points of tax authorities' verification. Enterprises shall complete document filing within 15 days after tax refund declaration, including export goods customs declaration form, export invoice, bill of lading, packing list, purchase and sales contract, etc. If paperless filing is adopted, you shall ensure the clarity and integrity of electronic documents, and they can be retrieved at any time. Tax authorities will conduct spot checks on filed documents.
If documents are missing or information is inconsistent, enterprises will be required to provide supplementary explanations. If valid supporting materials cannot be provided, the tax refund will be suspended. In addition, enterprises shall ensure the "four flows" matching of filed documents, for example, the payment terms of the purchase and sales contract shall correspond to the payment amount and time on the foreign exchange receipt, otherwise it will be identified as doubtful transaction authenticity and in-depth investigation will be launched.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The compliance of foreign exchange receipt and payment is an important verification dimension in the export tax refund investigation and evaluation process. Enterprises shall ensure that foreign exchange income matches the amount and time of export goods. If there is a delay in foreign exchange receipt, you shall submit an explanation letter for delayed foreign exchange receipt and relevant supporting materials to the tax authority, such as the deferred payment agreement signed with overseas customers.
If the enterprise adopts RMB cross-border settlement, it shall ensure that the payment message information of the CIPS system is consistent with the information of the export customs declaration form and the contract, and there shall be no abnormal capital return. In addition, enterprises shall avoid mixing foreign exchange income from non-export business into the export foreign exchange receipt account, otherwise it will be identified as abnormal capital flow by the tax authority, trigger investigation and evaluation, and even suspend the tax refund qualification.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The completeness and standardization of purchase and sales contract terms can serve as core supporting evidence for transaction authenticity in the export tax refund investigation and evaluation process. Enterprises shall ensure that the contract clearly stipulates information such as commodity name, specification model, quantity, unit price, delivery method and payment method, which is fully consistent with the information on the customs declaration form, invoice and bill of lading.
If there is a supplementary agreement to the contract, the supplementary agreement shall be submitted to the tax authority for verification together, to avoid being identified as suspicious transaction due to inconsistent terms. In addition, if the enterprise delays delivery due to force majeure, you shall prepare relevant supporting materials (such as delay notice issued by the shipping company), and clarify the force majeure clause in the contract, to avoid the upgrade of investigation and evaluation caused by inconsistent goods flow time.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Customs on-site inspection records are important supporting materials for the authenticity of goods flow in the export tax refund investigation and evaluation process. If export goods are inspected by the customs at the port, the enterprise shall properly keep the inspection notice, inspection records, on-site photos and other materials, and submit them to the tax authority in time during the investigation and evaluation process.
If the inspection record indicates that the goods are consistent with the information on the customs declaration form, it can effectively prove the authenticity of the goods flow and speed up the audit progress; if the inspection finds that the goods are inconsistent with the customs declaration form, the enterprise shall apply to the customs for modifying the customs declaration form in time, and submit the modified customs declaration form and the inspection explanation issued by the customs to the tax authority, to avoid being identified as defrauding tax refunds due to abnormal goods flow. In addition, enterprises shall ensure that the actual packing situation of the goods is consistent with the packing list, otherwise the validity of the inspection record will be affected.