By Victor Tu
On January 6 and June 2, 2015, the Ministry of Finance and the National Tax Bureau released regulations with respect to the tax refund for goods purchased by individual foreign tourists in mainland China on their departure. Today we will take a closer look at these rules.
What is Departure Tax refund Policy and its rate?
A foreign traveler leaves mainland China by any means of transportation, she or he has the right to get the VAT refund for the purchased goods in an authorized store (tax free store).
The refundable tax =Purchased price (inclusive of VAT) × 11%.
i.e. You purchased an electronic appliance amounting RMB2,000(total amount on invoice) and you will get tax refund for RMB220 (2000*11%).
Where could you apply for the refund?
Any Air, Water and Land departure port, where is authorized to conduct the VAT refund and in meanwhile where there are appointed agencies (i.e. Beijing Capital International Airport).
Who can get the tax refund?
Any foreigners (inclusive of residents from Hong Kong, Taiwan and Macau), who stay less than accumulated 183 days in Mainland China.
What are the conditions for the tax refund?
l 3 “same”, the same international traveler shops in the same tax free store in the same day. And the shopping amount is not less than RMB 500. (i.e. there are 57 tax free stores in Beijing as of June 30, 2015)
l The products have not been unpacked or consumed.
l The period time between purchase day and departure day is less than 90 days.
l The all products must leave outside Mainland China by carry-on or other means of shipment.
How to apply for the departure tax refund?
Step1: Purchasing the goods and obtaining the departure tax refund application form and invoice from the authorized tax free store.
Step 2: Submitting the goods, application form and invoice to the Customs for inspection and approval.
Step 3: In the departure area, there are always tax refund agencies (banks), where you could submit your passport, approved documents by Customs, invoice for processing the tax refund. And the agencies will pay you the taxes immediately on behalf of the tax bureau and of course they will charge you around 2% of your tax refunded (statutory policy).
Step 4: The international tourists will only get the Chinese Yuan (RMB) and paid by cash in person for amount less than RMB10, 000, otherwise by the bank wire transfer.
Step 5: The agencies will settle the payment with the tax bureau in a specific period.
If you have any other details to know, please send the email to firstname.lastname@example.org , you are always welcome.
Keywords: Ningbo accounting, Ningbo Auditor, Ningbo accountants, Ningbo CPA
Victor & Truman，CPAs 宁波纬度会计师事务所（普通合伙）