The trade conflict between China and the United States escalated in 2018, casting a shadow of doubt over the export business. The Chinese government has implemented a series of measures to encourage foreign trade and mitigate the damage caused by the trade conflict.
In the last quarter of 2018, China’s Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly issued a notice (Caishui  No. 123) which increased the export VAT refund rates of certain products. Furthermore, the SAT also issued Announcement  No. 48 to improve the classification of businesses and the efficiency of export VAT refunds.
The product categories and rates affected by Caishui  No. 123 are summarised below:
|Products||Export VAT refund rate
(before 1 November 2018)
|Export VAT refund rate
(from 1 November 2018)
|Photographic paper and film, plastics, bamboo floor coverings, straw woven fabrics, tempered safety glass, lamps, etc.||13%||16%|
|Lubricants, aircraft tyres, carbon fibre, certain metal products, etc||9%||13%|
|Certain agricultural products, bricks, tiles, glass fibre, etc.||5%||10%|
|Soybean meal||13%||Export VAT refund has been cancelled.|
The new export VAT refund rates took effect on 1 November 2018.
Announcement  No. 48 contains the following provisions to improve the efficiency of export VAT refunds:
I. Revision of classification procedures for export tax refund applicants
II. E-declaration for export tax refunds
III. Strong support for the development of foreign trade
IV. Provision of export tax refund (exemption) services to enterprises.
The Global VAT Newsletter focuses on changes in compliance duties in various EU and non-EU countries
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