Facilitation Measures for Tax Refund on Export


published on 12 August 2022 | reading time approx. 3 minutes

In May 2022, the State Administration of Taxation (SAT) released SAT Notice [2022] No. 9, which includes several new measures for export tax refund, that should be paid attention to. We summarized the measures as follows:

Promoting export tax refund (exemption) without upfront on-site inspection

The formerly initial application of export tax refund (exemption), which requires upfront on-site inspection, could be proceeded without the inspection now, as long as the cumulatively declared VAT refundable (exemption) does not exceed the set limit. The transactions concerned include goods export, goods deemed-as-export, foreign process, repair and replacement services, cross-border VAT taxable services subject to zero-rate VAT. The set limits are RMB 1 million for trading companies and RMB 2 million for manufacturing companies.

Simplified export tax refund (exemption) processing measures

Taxpayers may apply for relevant certification in electronic forms which will be obtained via online channels such as electronic tax bureau or “Single Window” for international trading.

Improving proceeds collection management requirements

  • Except for those taxpayers under strict supervision, or those who are found to have used fake proceeds collection documents by tax authorities, and certain special proceeds collections situations, in general, taxpayers are not required to submit proceeds collection documents when applying for export tax refund (exemption). Taxpayers should well-keep the relevant supporting documents for further inspections.
  • Under the circumstance that proceeds are not collected within the time limit but can be regarded as collected, taxpayers are only required to well-keep the supporting documents without additional declaration to the tax authorities. Besides, one more circumstance is regarded as proceeds collected: if credit insurance has compensated for the uncollectable proceeds, proceeds are regarded as collected, which is eligible for tax refund.

Our View

Except for those taxpayers under strict supervision, the measures for export tax refund for normal taxpayers are turning to be taxpayer-friendly. However, loosened supervision measures do not mean taxpayers can loosen their own tax compliance management. For example, export tax refund (exemption) without upfront on-site inspection does not mean the on-site inspection is fully exempted. Enterprises should make sure that they can meet all the requirements when on-site inspection is carried out; When taxpayers obtained the certification for export tax refund (exemption) in electronic forms, abolishment of the issued electronic certification in a compliant way should be noted; Under the circumstance when proceeds collection documents are not required to be submitted, taxpayers should set up complete and traceable internal documentation for all proceeds collection, for properly respond to tax authorities’ inspection in any time.

At the same time, it is noted taxpayers' credit rating will have direct impact on the their classified administration of export tax refund (exemption). Any dishonest behavior in export tax refund will also have negative impact on taxpayers’ credit rating, and consequently on the administration measures of other taxes. The management in taxpayer’s credit rating and tax compliance has become crucial in corporate operation nowadays.

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