Tax Refund

GOOD NEWS! From July 1st, 2015, Beijing and Shanghai have implemented the tax refund policy. Overseas travelers and travelers from Hong Kong, Macau and Taiwan can enjoy a Valued Add Tax (VAT) refund policy when they leave China. At present, Beijing has 86 tax free stores while Shanghai has 27 tax free stores, including big department stores and all kinds of specialty stores, and these stores almost cover everything foreign travelers want to purchase in China. Most of the tax free stores are located in downtown business district, tourist shopping area and residential and business community of foreigners. It’s estimated that there will be more and more tax free stores at the end of 2015. Also, there will be more and more cities will implement the tax refund policy in the near future according to the official statement.

Who can Enjoy the Tax Refund Policy?

According to the announcement of the government, overseas, Hong Kong, Macau and Taiwan travelers, who stay in China no more than continuous 183 days, purchasing articles which satisfy the tax refund conditions and only for personal use in designated tax free stores, not including the articles prohibited and restricted by PRC from importing and exporting, can enjoy the tax refund policy when they leave China.

See more prohibited and restricted articles of importing and exporting in Entry Regulations and Exit Regulations.

Tax Refund Conditions

1.One traveler shall purchase over RMB500 commodities in one tax free store in one day.

2.The tax refund articles shall not be open and used.

3.The departure date and the purchase date of the articles shall not be over 90 days.

4.The purchased tax free articles shall be brought out of China with the traveler himself or be shipped as luggage.

Tax Refund Process

1.Purchase tax refund articles

After purchasing the tax free articles in tax free stores, overseas travelers need to ask for the tax refund form and sales invoice from the store. When fill in the tax refund form, traveler’s name, purchase amount, passport number and amount of refund tax need to be carefully filled.

2.Verification and confirmation by the Customs

When leaving China, overseas traveler need to present tax refund articles, tax refund form and sales invoice to the Customs on the departure port for verification and confirmation. After that, the Customs will stamp on the tax refund form.

Notice: travelers need to present tax refund form, valid identification document and tax refund articles to the Customs.

3.Get refund tax from the agency

The refund tax shall be return to the traveler by the tax refund agency in the departure port. Overseas traveler will present valid identification document, stamped tax refund form, sales invoice of the tax free articles to the tax refund agency. After verification and confirmation, the agency will return VAT to the traveler.

Notice: the agency will charge necessary commission fees.

Rebate Way

There are two ways to refund: cash or bank transfer. If the refund value is less than 10,000, traveler can choose to receive the tax refund through cash or bank transfer. If the value is more than 10,000, bank transfer is the only refund way.

Tax Category and Currency

For the tax refund policy, China only refunds the Value Added Tax of the goods, and the refund money will be RMB.

Tax Rebate Amount

The tax rebate will be based on the plain invoice amount (including VAT), and the tax rebate rate is 11%. The calculation formula is:

Refundable Tax = Invoice Amount (including VAT) of the Tax Free Articles ×11%

However, the tax rebate will charge 2% of the invoice amount as commission fee, thus,

Actual VAT Rebate = Invoice Amount of the Tax Free Articles × (11% －2%)

Designated Port for Tax Refund

In Beijing and Shanghai, overseas travelers can handle the tax refund process at Beijing Capital International Airport, Shanghai Pudong International Airport and Shanghai Hongqiao International Airport. Traveler can also enjoy the tax refund policy at Hainan, the first province to promote the tax refund policy. The designated ports in Hainan are Haikou Meilan International Airport and Sanya Phoenix International Airport.