Is It Required to Pay VAT First Before Applying for Refund in the Export Tax Refund Process?

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  • Nov 5, 2026 at 04:59
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I am the owner of a newly established small home appliance export enterprise in Shanghai. Our first batch of goods will be shipped to Hamburg, Germany recently, and I have been too anxious to sleep over the export tax refund issue these days. Senior peers told me that we need to pay VAT first before applying for export tax refund, but our company is just founded with tight cash flow.

If we really need to advance capital to pay tax first, it may affect the production of subsequent orders. I want to confirm under the 2026 policies, whether all export goods must pay VAT first to get tax refund? If yes, what is the payment rate?

Are there any compliant ways to avoid paying first? Besides, I heard that incomplete documents will lead to delayed refund even no refund at all, so what materials do I need to prepare in advance to ensure smooth declaration? Our company is a general taxpayer, are there any special policies applicable to newly established export enterprises?

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Expert Q&A

Michael Zhang
Michael ZhangYears of service：6Customer Rating：5.0

Customs Declaration & Compliance ExpertStart a Chat

Under the 2026 export tax refund policies，not all export goods require prior VAT payment for tax refund. For general taxpayer export enterprises，eligible goods can enjoy the VAT exemption-credit-refund scheme: "exemption" means VAT is exempted for the export link，"credit" means the tax payable of domestic sales goods is used to offset the refundable tax amount of export goods，"refund" means the remaining amount after offset will be refunded. Essentially，there is no need to advance capital to pay VAT first.

Three details shall be focused on in pre-document review: First，the "special copy for export tax refund" of the customs declaration form shall be filled with accurate commodity code，amount and quantity，which shall be fully consistent with the special VAT invoice，Second，the special VAT invoice shall be issued and certified within 15 days after the goods are delivered，Third，the foreign exchange receipt certificate shall be obtained within 90 days after export (extension of 3 months can be applied for under special circumstances). When newly established export enterprises apply for the first tax refund，they need to additionally provide bank deposit certificate，site lease agreement and supply contract to prove the authenticity of the business.

For the connection of core nodes，after export customs declaration，you need to submit the customs declaration information in the Electronic Port System，and then complete the exemption-credit-refund declaration within the VAT tax declaration period. If documents are missing，you need to apply for delayed declaration within the declaration period to avoid losing the tax refund qualification due to overdue. Enterprises with tight cash flow can apply for the "refund first，verification later" policy，but they need to meet requirements such as tax credit rating Grade A/B，no tax-related violation records in the past 3 years，etc.

The final compliant implementation shall ensure "four-flow consistency": contract flow，goods flow，capital flow and invoice flow are fully matched. It is recommended to establish a document management ledger，regularly check customs declaration forms，invoices，bills of lading and foreign exchange receipts，to avoid tax letter verification caused by inconsistent data. The "intelligent tax refund" system launched in 2026 allows real-time progress inquiry，so enterprises can plan capital use in advance.

Reference: Complete Process Analysis of Customs Declaration for Temporary Import and Export Goods: Seven Key Steps from Declaration to Verification
Kevin Lin
Kevin LinYears of service：4Customer Rating：5.0

Trade Solutions ManagerStart a Chat

From the perspective of customs declaration, whether export tax refund is paid first then refunded is closely related to the "levy and exemption nature" on the customs declaration form. If "general trade" is filled and the levy and exemption method is "tax exemption", no prior payment is required; if it is "levy tax according to regulations", payment is required.

In 2026, the customs realizes "real-time linkage between customs declaration form and tax refund system". Wrong filling of levy and exemption nature will lead to unrecognizable information in the tax refund system, and the declaration form needs to be deleted and re-submitted. It is recommended to confirm the levy and exemption nature with a tax consultant before customs declaration to avoid wrong filling affecting tax refund.

Lucas Liu
Lucas LiuYears of service：8Customer Rating：5.0

Senior Operations ConsultantStart a Chat

Operation in the logistics link indirectly affects tax refund. When FOB term is adopted, logistics costs are borne by the buyer, and it is necessary to ensure that the bill of lading information is consistent with the contract; for CIF term, freight and premium invoices shall be provided as tax refund vouchers.

If the cargo is rolled over or the port is changed, the customs declaration information shall be updated in time, otherwise the goods flow is inconsistent with the document flow, and the tax authority may require prior VAT payment. Reducing transit links through direct shipping solutions can reduce the risk of logistics abnormalities.

Evelyn Li
Evelyn LiYears of service：3Customer Rating：5.0

Cross-border Compliance SupervisorStart a Chat

From the perspective of tax planning, general taxpayer export enterprises can avoid paying first then refunding through the VAT exemption-credit-refund scheme. Small-scale taxpayers can only enjoy the tax exemption policy and are not eligible for tax refund.

The new "export tax refund fund pool" policy launched in 2026 allows enterprises to combine tax refund applications for multiple orders, shortening the capital collection time. Overseas subsidiaries can use the VAT deferral policy to delay VAT payment to the sales link, so as to optimize cash flow.

Eric Zhou
Eric ZhouYears of service：6Customer Rating：5.0

Senior Manager of Foreign Exchange & Tax RebatesStart a Chat

Compliance of foreign exchange receipt and payment is the prerequisite for tax refund. The foreign exchange receipt amount shall be consistent with the customs declaration form, and proof of exchange rate fluctuation shall be provided for exchange differences.

Foreign exchange received through CIPS can automatically synchronize information to the tax refund system, reducing manual errors. Foreign exchange received through offshore accounts shall be declared for settlement within 30 days, otherwise it will be regarded as abnormal capital flow, and the tax authority may suspend the tax refund qualification and require prior VAT payment.

Daniel Xu
Daniel XuYears of service：10Customer Rating：5.0

Director of Import & Export OperationsStart a Chat

From a legal perspective, "pay first then refund" is not a statutory requirement, but a passive situation caused by incomplete or non-standard documents of enterprises. According to the Administrative Measures for Tax Refund (Exemption) of Export Goods, eligible goods shall enjoy the exemption-credit-refund scheme.

The procurement contract shall specify the invoice issuing time (e.g. within 15 days after the goods are delivered), to avoid delayed invoice affecting tax refund declaration and reduce the risk of passive capital advance.

Linda Gao
Linda GaoYears of service：7Customer Rating：5.0

Documentation SupervisorStart a Chat

The result of on-site customs inspection affects tax refund. If the actual goods are inconsistent with the customs declaration form (differences in quantity and specification), the customs will issue an inspection record, and the tax authority may require prior VAT payment before verification.

The intelligent inspection system launched in 2026 allows uploading of goods pictures in advance, reducing the probability of inspection. In case of inspection, you shall timely provide procurement contracts, invoices and other materials to prove the authenticity of the business, so as to avoid delayed tax refund.

Jason Wu
Jason WuYears of service：10Customer Rating：5.0

International Logistics & Supply Chain ManagerStart a Chat

In tax refund audits, "pay first then refund" is mostly caused by "four-flow inconsistency". The tax authority verifies the consistency of contracts, invoices, customs declaration forms and foreign exchange receipts. Any difference will lead to requirement of prior VAT payment and supplementary materials.

Under the big data comparison in 2026, electronic and paper documents shall be consistent. It is recommended to establish a document filing system and keep tax refund materials for at least 5 years for audit verification.

Victor Sun
Victor SunYears of service：5Customer Rating：5.0

Trade Risk Control ManagerStart a Chat

For supply chain planning, choosing FCA trade term can optimize the tax refund process. The buyer is responsible for inland transportation, so enterprises can focus on document preparation.

The centralized customs declaration mode combines customs declaration of small orders, reducing the number of declarations and improving efficiency, so as to avoid document confusion. Add the clause that "logistics invoices shall be provided within 10 days after the goods arrive at the port" in the procurement contract, to ensure timely provision of documents and reduce tax refund risks.

Note: We respect all users' expressions; however, user comments represent their personal views only.

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