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What conditions must goods exported by mainland enterprises to Taiwan meet to apply for export tax refund?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade enterprise focusing on outdoor furniture in Dongguan. We have just signed a million-level order for the Taiwan region, which is our first time engaging in export business to Taiwan. We used to be very familiar with the export tax refund process for European and American markets, but I heard that the tax refund rules for exports to Taiwan are different from those for Europe and America. Some peers also said that mainland exports to Taiwan are not "real exports" and cannot enjoy the tax refund policy, which makes me very anxious.
The profit margin of this order is already very thin, and we will directly suffer a loss if we cannot get the tax refund. In addition, I am also worried whether using the exclusive ECFA channel or Small Three Links transportation will affect tax refund eligibility? Are there any special requirements for the preparation of documents such as customs declaration forms and foreign exchange receipt vouchers?
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
First of all，it should be clarified that goods exported from the Chinese mainland to Taiwan can be processed for tax refund normally as long as they meet the core access conditions for export tax refund，and there is no misunderstanding of "not counting as exports". The core access conditions include: goods actually leave the country，the enterprise is a general VAT payer，goods have been declared through formal ports and valid export declaration forms have been obtained，foreign exchange has been collected as required (deemed foreign exchange collection can be applied for under special circumstances)，and goods are within the scope of the national export tax refund commodity catalog.
Special attention should be paid to pre-document review: The "export port" marked on the customs declaration form must fully match the actual transportation channel. If the ECFA channel is used，the ECFA certificate of origin number must be clearly marked on the customs declaration form. The foreign exchange receipt voucher must be foreign exchange or RMB cross-border settlement voucher remitted from compliant corporate channels in Taiwan region，and the deviation between the amount and the customs declaration value，contract amount shall not exceed 5%. At the same time，documents such as special VAT invoices，packing lists and bills of lading shall be prepared to ensure the consistency of four streams: "goods，invoice，payment and document".
In terms of core node connection，customs declaration information confirmation should be completed within 30 days after goods leave the country，and tax refund declaration should be submitted within 90 days. If ECFA certificate of origin is involved，the authenticity review of the certificate should be completed before customs declaration，to avoid abnormal customs declaration information caused by certificate mismatch. The exception response plan shall cover: if there is a delay in foreign exchange collection，an application for deferred declaration shall be submitted to the tax authority 15 days in advance，if the information on the customs declaration form is incorrect，an application for form deletion and re-declaration shall be submitted within 10 days，to avoid affecting the tax refund time limit.
For final compliance implementation，if Small Three Links transportation is used，it is necessary to ensure that goods are declared and leave the country from designated ports such as Xiamen and Quanzhou in the Chinese mainland，and obtain the cargo transfer certificate issued by the transit place to prove that goods are actually transported to the main island of Taiwan，to avoid tax refund application being rejected due to "not actually leaving the country".
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
In the customs declaration process of tax refund handling for mainland exports to Taiwan, special attention should be paid to the filling of "trade mode" and "levy and exemption nature" on the customs declaration form. If ECFA tax rate is applicable, the levy and exemption nature corresponding to "preferential tax rate" shall be filled in, but this filling does not affect tax refund qualification, only need to ensure that the "export tax refund mark" on the customs declaration form is "Yes".
It should be noted that if goods are sensitive commodities under ECFA, an additional origin verification report shall be submitted to avoid customs valuation objections caused by mismatch between customs declaration information and certificate of origin, which will delay tax refund declaration. If the customs declaration form is suspended, an application for modification of the customs declaration form shall be submitted within 30 days to supplement and improve information such as goods value and specifications to ensure consistency with the content of the special VAT invoice, otherwise the correspondence adjustment process of the tax authority will be triggered and the tax refund arrival time will be delayed.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The choice of transportation route for mainland exports to Taiwan will affect the "actual departure" identification for tax refund. If direct shipping is selected, an "on board bill of lading" issued by the shipping company shall be obtained, the "port of loading" on the bill of lading shall be a formal seaport in the Chinese mainland, and the "port of discharge" shall be a port in Taiwan region; if Small Three Links transportation is selected, it is necessary to ensure that goods are declared and leave the country from designated ports such as Xiamen and Quanzhou in the Chinese mainland, obtain the "customs declaration form for Small Three Links goods from the mainland to Taiwan region" issued by the customs, and obtain the cargo transshipment certificate issued by the transit agency in Kinmen or Matsu to prove that goods have actually been transported to the main island of Taiwan.
If the above vouchers are not obtained, the tax authority may determine that goods have not actually left the country and reject the tax refund application. In addition, it is necessary to avoid using "grey customs clearance" channels, otherwise the customs declaration form will be invalid and tax refund cannot be handled.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The tax refund operation for mainland exports to Taiwan can be combined with ECFA policy for tax planning to maximize benefits. If goods meet the ECFA rules of origin, they can enjoy tariff reduction and exemption while handling export tax refund normally, without worrying about the conflict of double preferences. It should be noted that enterprises shall file ECFA certificates of origin and tax refund documents separately to avoid failure to retrieve them quickly during tax inspection due to mixed placement of documents.
In addition, if an enterprise adopts cross-border RMB settlement, it shall ensure that the foreign exchange receipt voucher is the RMB cross-border payment voucher issued by the CIPS system, and the counterparty on the voucher shall be consistent with the purchaser in Taiwan region, otherwise it may be deemed as "inconsistent foreign exchange receipt" and affect tax refund qualification. For enterprises with annual export value exceeding 10 million, they can apply for the "green channel" of the tax authority to shorten the tax refund review cycle and speed up capital return.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
In the foreign exchange receipt and payment link of tax refund for mainland exports to Taiwan, it is necessary to strictly comply with cross-border foreign exchange receipt and payment compliance requirements. If foreign exchange settlement is adopted, it shall be ensured that the foreign exchange received comes from the corporate account of the purchaser in Taiwan region, and the deviation between the received amount and the customs declaration value shall not exceed 5%; if RMB settlement is adopted, the payment shall be completed through the CIPS system, and personal accounts shall not be used for settlement, otherwise it will trigger the inspection of the State Administration of Foreign Exchange and affect tax refund declaration.
It should be noted that if there is advance payment for goods, the contract filing of the advance payment shall be completed before the export of goods, and the settlement voucher of the advance payment shall be submitted when declaring the tax refund, to avoid being deemed as a capital return risk due to "unfiled advance payment" and resulting in the rejection of the tax refund application. In addition, enterprises shall sort out the foreign exchange receipt situation on a monthly basis, and write off exported goods without foreign exchange receipt in time to avoid overdue affecting subsequent tax refund qualification.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
For the tax refund operation of mainland exports to Taiwan, attention shall be paid to relevant clauses in the trade contract to avoid affecting tax refund qualification due to contract defects. The contract shall clearly stipulate the transportation mode of goods, customs declaration responsibility, document delivery time and other contents. If it is agreed that the Taiwan purchaser is responsible for customs declaration, it shall be ensured that the enterprise can still obtain the export declaration form issued by the mainland customs, otherwise tax refund cannot be handled.
It should be noted that if there is a clause in the contract that "the order will be cancelled if goods fail to pass the ECFA review", a customs declaration plan for non-ECFA channels shall be prepared in advance, to avoid return of goods due to order cancellation, which will affect the declared tax refund. In addition, enterprises shall keep trade contracts, communication emails, communication records and other materials as supporting certification materials during tax inspection, to avoid being required to return the refunded tax due to failure to provide proof of transaction authenticity.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
If goods exported from the mainland to Taiwan are subject to on-site inspection by the customs, they shall cooperate with inspection personnel to complete goods verification, to avoid affecting tax refund due to abnormal inspection. During the inspection, it shall be ensured that the actual specifications, quantity and brand of goods are consistent with the contents of the customs declaration form and the special VAT invoice.
If there are branded goods, the brand authorization certificate shall be provided to avoid being deemed as false export due to "mismatch between goods and documents". It should be noted that if goods are commodities under ECFA, the ECFA certificate of origin shall be presented during the inspection, and inspection personnel shall be cooperated to complete origin verification.
If the verification fails, the levy and exemption nature of the customs declaration form shall be adjusted in time, to avoid abnormal tax refund declaration caused by wrong filling of levy and exemption nature. In addition, after the inspection is completed, the "inspection and release notice" issued by the customs shall be obtained and filed together with tax refund documents as supporting certification materials for the actual departure of goods.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The tax refund operation for mainland exports to Taiwan shall ensure "consistency of four streams", that is, goods flow, invoice flow, capital flow and document flow are completely matched. During export tax refund audit, the tax authority focuses on verifying whether the issuance time of the special VAT invoice matches the export time of goods.
If the invoice issuance time is more than 30 days earlier than the export time of goods, reasonable transaction certification materials shall be provided, otherwise it may be deemed as a risk of false invoicing. It should be noted that enterprises shall complete foreign exchange receipt within 180 days after the export of goods.
If they cannot collect foreign exchange on time due to special circumstances, they shall apply to the tax authority for deemed foreign exchange collection filing in advance, to avoid cancellation of tax refund qualification due to overdue foreign exchange receipt. In addition, enterprises shall sort out tax refund documents on a monthly basis and establish a document filing ledger to ensure that relevant materials can be retrieved quickly during tax correspondence adjustment and shorten the correspondence adjustment cycle.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The tax refund operation for mainland exports to Taiwan can be combined with supply chain structure optimization to improve tax refund efficiency. If an enterprise has a procurement office in Taiwan, it can adopt the mode of "mainland production - export to Taiwan - distribution in Taiwan" to embed the tax refund link into the front end of the supply chain, plan the transportation channel and customs declaration time of goods in advance, and ensure that tax refund declaration and goods export are promoted synchronously.
It should be noted that if an enterprise adopts the "bonded zone factory transfer" mode to export to Taiwan, it shall ensure that goods actually leave the country from the bonded zone and obtain the export declaration form issued by the bonded zone customs, to avoid being unable to handle tax refund due to "factory transfer without leaving the country". In addition, enterprises can optimize inventory management, shorten the production to export cycle of goods, ensure that foreign exchange collection and document preparation are completed within the tax refund declaration period, and avoid missing the tax refund opportunity due to overdue declaration.