Beijing & Shanghai to launch Tax Refund Policy from July 1st, 2015
News: After a nationwide tax refund policy launched in January 2015, and a pilot trial in Hainan Province, the policy has taken effect from last week throughout the country, Beijing and Shanghai start to launch Tax Refund Policy from July 1st, 2015.
VAT Tax Refund Policy
When overseas travelers leave China, they can claim 11% refund of the Value Added Tax (VAT) added to goods purchased in tax free stores. Overseas travelers are foreigners or residents from Hong Kong, Macau, Taiwan, who continuously stay in China no more than 183 days.
Goods for VAT refund
Goods eligible for VAT refund are goods purchased by overseas traveler in tax free stores for personal use, and that are eligible for VAT refund. Excluding the following items:
1. Goods listed in the List of the People’s Republic of China of Articles Prohibited and Restricted from Import and Export.
2. Tax free goods sold in the tax free stores.
3. Other goods mentioned by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.
Tax Refund Requirements
1. The amount of purchase made by one overseas traveler in one tax free store in one day should be over RMB 500.
2. The goods purchased have not been used or consumed.
3. The time period between leaving date & purchasing date should not be over 90 days.
4. The goods claimed for VAT refund will be carried by overseas travelers or transported with their luggage.
Tax Refund Calculating Formulas
Refundable VAT amount = total invoice amount (VAT-inclusive) * tax refund rate (11%)
The commission fee charged by tax refund agency = total invoice amount (VAT-inclusive) *commission rate (2%)
Net VAT refund = refundable VAT amount – commission fee charged by tax refund agency
TAX Refund Procedures
1. Purchase of goods eligible for tax refund. Overseas travelers should request the VAT refund application form and sales invoice from tax free store after buying.
2. Verification by the Customs. Overseas travelers should provide goods purchased, sales invoice and VAT refund application forms to the Customs for application and verification. The Customs will sign & stamp on the VAT refund application form after verification.
3. VAT reimbursed by tax refund agency. VAT refund shall be processed & reimbursed by the tax refund agency located in the isolated area. Overseas travelers should provide Passport, tax refund application form stamped by the Customs and sales invoice to the agency that process the VAT refund. The agency shall audit all the documentation, if everything is good, the agency will pay VAT refund to the overseas travelers by charging the commission fee.
TAX Refund Agency in Beijing
Bank of China – Beijing Branch
Two Places in Beijing Capital International Airport:
1. Across from the duty-free store, behind security checkpoint on the 2nd floor T3E, Terminal 3 of Beijing Capital International Airport
2. T-junction, T2 International Departure, Terminal 2 of Beijing Capital International Airport
TAX Refund Currency
The currency of tax refund is RMB. The payment method will be either cash or bank transfer.
Overseas travelers can choose one of the two payment methods, if the VAT refund amount is less than RMB 10,000.
If the refund amount is over RMB 10,000. It must be done by bank transfer.