Detailed Explanation of Export Tax Refund (Exemption) Policy: How to Transform Tax Benefits into Competitiveness for Going Global? | Overseas Busines

Against the backdrop of the accelerating reconstruction of the global trade pattern, the export tax rebate policy is becoming a key support point for Chinese enterprises going global.

In 2025, the State Taxation Administration introduced a new regulation on "tax rebate upon departure" for cross - border e - commerce overseas warehouses. It advances the tax rebate time point from "after the goods are sold" to "when the goods are cleared through customs and leave the country", and allows the booking note to replace the export contract for filing. This change is particularly crucial for small and medium - sized cross - border merchants with asset - light operations.

However, there are still hidden risks behind the policy dividends: How to define the applicable boundaries between tax exemption and tax rebate? What are the operational differences between the entities applying "tax exemption, credit and refund" and "tax exemption and refund"? What are the "minefields" for illegal application of taxation?

Exported goods and services

01 Tax refund (exemption) policy

 1   Policy overview 

China's export tax refund (exemption) policy for goods and services refers to the tax system that refunds or exempts value - added tax (VAT) and consumption tax on export products. Its main function is to adjust the difference in tax burdens between domestic and foreign products. According to the document No. 39 [2012] issued by the Ministry of Finance and Taxation, this policy mainly involves two types of taxes: VAT and consumption tax.

01

VAT: For exported goods and services, policies of VAT exemption and refund are implemented.

02

Consumption tax: Export enterprises that export or are regarded as exporting goods eligible for VAT refund (exemption) are exempt from consumption tax. If the goods are purchased for export, the consumption tax already paid in the previous link will be refunded.

For goods that are subject to consumption tax and VAT, are actually cleared through customs and leave the country, are sold to overseas units or individuals, are accounted for as sales in finance, and have completed export foreign exchange collection, currently there are mainly two methods applicable to the tax refund (exemption) policy: "tax exemption, credit and refund" and "tax exemption and refund":

01

Tax exemption, credit and refund: Production enterprises exporting self - produced goods, goods regarded as self - produced goods, and providing processing, repair and replacement services to foreign parties, as well as listed production enterprises exporting non - self - produced goods, are exempt from VAT. The corresponding input tax can be used to offset the payable VAT, and the part that cannot be offset will be refunded.

02

Tax exemption and refund: It refers to the situation where export enterprises without production capacity (i.e., foreign trade enterprises) or other entities export goods and services, are exempt from VAT, and the corresponding input tax will be refunded.

 2   Export tax refund (exemption) policy for goods and services 

It mainly includes the following situations:

Export of specified specific goods:

For example, goods exported by small - scale taxpayers, software products, used equipment that did not obtain VAT special invoices or customs import VAT special payment vouchers when purchased but has all other documents in order, goods corresponding to ordinary invoices or agricultural product purchase invoices obtained by foreign trade enterprises, etc. These goods are subject to the tax exemption policy and are not eligible for tax refund.

Regarded as export:

It mainly includes tax - free shopping sold by tax - free stores approved by the state; processing, repair and replacement services provided by enterprises in special areas to overseas units and individuals; sales of goods within special areas between enterprises in the same special area or different special areas.

Other situations:

Exported goods of export enterprises or other entities that have not filed documents as required; imported tax - free goods sold by tax - free goods operating enterprises approved by the state to tax - free stores; cigarettes purchased by cigarette export enterprises according to the tax - free export cigarette plan approved by the competent tax authorities; export enterprises voluntarily giving up the application of the tax refund (exemption) policy and choosing to apply the VAT exemption policy; goods that the tax authorities find are not eligible for tax refund according to regulations during the review process; exported goods that cannot receive foreign exchange and do not meet the regulations regarded as foreign exchange receipt.

The following are some risk warnings for the application of the tax exemption policy for exported goods and services:

01

When applying the VAT exemption policy, the relevant input tax cannot be deducted or refunded and should be transferred to the cost as required.

02

Export enterprises exporting or regarded as exporting goods eligible for the VAT exemption policy are exempt from consumption tax, but the consumption tax already paid in the previous link will not be refunded, and it is not allowed to be deducted from the payable consumption tax of domestic sales of taxable consumer goods.

 3   Two major classifications of the VAT taxation policy 

In the taxation policy for exported goods and services, there are mainly two major categories applicable to the VAT taxation policy:

The state clearly stipulates that specific exported goods and services (such as "two high and one capital" products whose export tax rebates have been cancelled by the state to optimize the industrial structure) are not eligible for tax refund and are subject to the VAT taxation policy.

Exported goods and services that originally fall within the scope of tax refund (exemption) will be subject to the taxation policy if the enterprise has illegal or irregular behaviors in the export activities.

Cross - border taxable activities

02 VAT zero - rate policy

According to the announcement of the State Taxation Administration, the VAT zero - rate policy for cross - border taxable activities means that general VAT taxpayers within the territory of the People's Republic of China providing taxable services eligible for the VAT zero - rate implement the VAT refund (exemption) method.

 1   Major categories of services applicable to the zero - rate policy 

1) International transportation services

2) Space transportation services

3) Services provided to overseas units and completely consumed overseas

Specifically, it includes R & D services, contract energy management services, design services, radio and television services, software services, circuit design and testing services, information system services, business process management services, offshore outsourcing services, and technology transfer services

4) Other services stipulated by the Ministry of Finance and the State Taxation Administration

 2   Compliance tips 

Compliance tips for applying the VAT zero - rate policy for cross - border taxable activities:

1) Taxable services eligible for the VAT zero - rate and implementing the VAT refund (exemption) method cannot issue VAT special invoices;

2) Taxable services provided by domestic units and individuals to units or individuals within domestic special customs supervision areas and places do not fall within the scope of applicable VAT zero - rate taxable services;

3) Providers of VAT zero - rate taxable services should handle the export tax refund (exemption) filing as required before declaring tax refund (exemption) (it needs to be handled on the e - tax bureau);

4) Taxpayers engaging in zero - rate cross - border taxable services do not implement the filing document management (i.e., there is no need for filing document management).

Cross - border e - commerce exports to overseas warehouses

03 Facilitation measures for export tax refund (exemption)

The State Taxation Administration issued a new announcement in 2025. It supports the development of the cross - border e - commerce export to overseas warehouses model, optimizes the process of handling export tax refund (exemption). Taxpayers exporting goods in the way of exporting to overseas warehouses can apply for export tax refund (exemption) after the goods are cleared through customs and leave the country.

 1   Declaration methods 

For goods that have been sold: Apply for export tax refund (exemption) as required.

For goods that have not been sold: The method of "tax refund upon departure, final accounting after sales" can be used to apply for export tax refund (exemption). That is, after the goods are cleared through customs and leave the country, taxpayers can apply for export tax refund (exemption) in advance, and then conduct the final tax accounting according to the actual sales situation of the goods.

 2   Main changes compared with the previous policy 

01

Advancement of the tax refund time point: It is advanced from after the goods are sold to when the goods are cleared through customs and leave the country.

02

Simplification of document filing: It allows using documents such as the booking note of the overseas warehouse and the proof of goods ownership to replace the export contract as the filing document.

03

Optimization of the declaration process: It changes from "one - time declaration" to the method of "tax refund upon departure, final accounting after sales".

04

New requirements for change/withdrawal: If taxpayers need to change the tax refund (exemption) method or withdraw the export tax refund (exemption) filing, they should first conduct the accounting of the pre - export tax refund.

05

New filing documents: Enterprises are required to keep relevant sales supporting materials (such as sales accounting vouchers, sales ledgers, etc.) within 15 days after sales/declaration for the tax authorities' verification.

This article is from the WeChat public account "Hangzhou Qiantang Enterprise Going Global Service Base". Author: Zhejiang Enterprises Going Global. It is published with the authorization of Qiantang.