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Quanzhou
Export Tax Rebate refers to refunds of indirect taxes paid by exporting
enterprises in the production and distribution process. China began to
implement its export tax rebate policy in April 1985 as a way to enhance the
country’s competitiveness in foreign markets by eliminating double taxation on
exported goods.
Quanzhou Export Tax Rebate –
Value-added Tax Rebates
Exported
goods are generally subject to zero percent VAT, for these goods, the VAT
exemption and rebate policy applies (discussed below). Some goods are exempt
from VAT. The difference between zero-rated goods and goods exempt from VAT
lies in the refundability of input VAT.
For both
zero-rated and exempt goods, no output VAT is payable. For zero-rated goods,
input VAT is refundable. For exempt goods, input VAT credits cannot be refunded
nor used to deduct output VAT from domestically sold goods, but can be added
into the cost of the exported goods. Some examples of VAT exempt goods are:
•Goods
exported by small-scale VAT taxpayers
•Software
products
•Used
equipment
•Agricultural
products produced by agricultural manufacturers
•Duty-free
exports such as oil paintings, nuts, and black beans
Quanzhou Export Tax Rebate – VAT
Exemption and Rebate Policy
There
are two ways to implement the VAT exemption and rebate policy applicable to
zero-rated goods:
•Exemption,
credit, and refund method (ECR method); and
•Exemption
and refund method (ER method).
ECR
Method
The ECR
method is generally applicable only to production enterprises qualified as general
taxpayers (no credit and refund is available for small-scale taxpayers).
Exemption means that goods which are exported by production enterprises either
directly or on consignment through foreign trade companies are exempt from
output VAT.
Credit
means that, for enterprises whose self-produced goods are both exported and
sold domestically, the input VAT credit on materials purchased for the
production of export goods is offset against the output VAT on domestic sales.
Refund
means that, after offsetting the input VAT against the VAT payable, any excess
amount of input VAT is refundable.
ER
Method
The ER
method is applied to the export of goods or services by export enterprises or
other enterprises with no manufacturing capabilities. Under the ER method,
output VAT of the exported goods is exempted, and a certain portion of input
VAT is refundable, but not creditable.
Consumption
Tax Rebate
In
general, export goods are not subject to consumption tax. For goods covered by
the VAT exemption and rebate policy, CT is also exempt. If the exported goods
were originally imported into China, the CT paid at import is refundable.
For
goods that are VAT exempt, CT is also exempt, however, previously paid CT is
neither refundable nor creditable from CT payable for domestically sold goods.
Contact
us
If
you have further queries, please contact Tannet
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hours Malaysia hotline：603-21418908;
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hours Hong Kong hotline：852-27837818;
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hours Hong Kong hotline：86-755-
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