Detailed Explanation of the Export Tax Refund Process to Support the Development of Foreign Trade Enterprises

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The export tax refund is a tax policy implemented by China to support the development of foreign trade enterprises. By refunding the value-added tax and consumption tax paid in the domestic production and circulation stages, the overall tax burden of exported goods is reduced to zero. This mechanism not only reduces the tax burden on enterprises but also avoids international double taxation, aligning with international practices.

For foreign trade enterprises, the export tax refund directly enhances their competitiveness in the international market. Taking foreign trade remittance tax policies as an example, rational use of the refund policy can significantly reduce enterprise costs, enhance profitability, and provide crucial support for enterprises to expand into overseas markets.

Key Points

• The export tax refund policy can effectively reduce the tax burden of foreign trade enterprises and enhance their competitiveness in the international market.
• Enterprises must meet specific qualification requirements to ensure legal operations and successfully apply for tax refunds.
• Timely declaration of tax refunds is critical, typically required within 90 days after the export of goods.
• Complete documentation is the foundation for a successful tax refund application, ensuring information consistency.
• Rational use of refund funds can be applied to expand production, explore markets, and optimize cash flow.

Conditions for Export Tax Refund

Enterprise Qualification Requirements

To apply for an export tax refund, your enterprise needs to meet a series of qualification requirements. These requirements not only ensure the enterprise’s ability to operate legally but also guarantee the smooth progress of the export tax refund process. The main indicators are as follows:

In addition, enterprises must have a sound financial management system and export business records. You can ensure compliance with the latest policy requirements by regularly updating enterprise qualification documents.

Scope of Exported Goods

The export tax refund policy applies only to goods within a specific scope. According to relevant regulations, the following goods qualify for tax refunds:

• Goods or products within the scope of value-added tax and consumption tax.
• Goods exported through customs clearance.
• Products recorded as export sales in financial accounts.
• Goods for which export proceeds have been received.
• Self-produced goods by manufacturing enterprises or goods deemed as self-produced.

Furthermore, according to the Customs Statistics Regulations and the standards of the United Nations Statistical Commission, only goods that actually cross the border and cause changes in domestic material inventory are included in the statistical scope. These standards ensure that the implementation of the export tax refund policy is more standardized and transparent.

It should be noted that some goods have had their tax refund policies canceled, such as crude oil, timber, and pulp. Additionally, the refund rate for gasoline and unrefined zinc has been reduced to 11%, unrefined aluminum to 8%, and coke to 5%. You should stay updated on policy changes and adjust export strategies accordingly.

Declaration Time Limit

The declaration time limit for export tax refunds is a critical factor in ensuring the efficient operation of the refund process. According to the latest policies, you need to complete the tax refund declaration within the specified period after the goods are exported. Typically, the declaration must be completed within 90 days after the export of goods.

Starting from July 16, 2024, Chinese export enterprises must use the new version of the tax refund rate database for declarations. You can download the offline declaration software upgrade program to ensure the accuracy and timeliness of declaration data. Failure to declare on time may result in the rejection or delay of the tax refund application, so it is recommended to prepare relevant documents in advance to avoid delays due to timing issues.

Foreign Trade Remittance Tax Policies

Tax Exemption Policy

The tax exemption policy is an essential component of foreign trade remittance tax policies, aimed at reducing the tax burden on enterprises. By exempting exported goods from value-added tax and consumption tax, enterprises can lower costs and enhance their competitiveness in the international market.

The following are the common scopes of the tax exemption policy:

• Exported goods or services.
• International transportation services.
• Certain cross-border e-commerce businesses.

You need to ensure that exported goods meet the exemption conditions and provide complete documentation during declaration. By rationally utilizing the tax exemption policy, you can effectively reduce tax expenses and create more profit margins for your enterprise.

Tax Refund Policy

The tax refund policy is one of the most commonly used forms of foreign trade remittance tax policies. It helps enterprises achieve “zero tax burden” exports by refunding the value-added tax and consumption tax paid in the domestic production and circulation stages.

The implementation process of the tax refund policy includes:

1. Enterprise registration: Ensure that enterprise qualifications meet the refund requirements.
2. Customs clearance of goods: Complete the customs clearance procedures for exported goods.
3. Application submission: Submit the tax refund application within the specified period.

The advantage of the tax refund policy lies in its ability to reduce the tax burden on enterprises and improve cash flow efficiency. By optimizing the refund process, you can further enhance your enterprise’s operational efficiency.

Tax Exemption, Offset, and Refund Policy

The tax exemption, offset, and refund policy is a special form of foreign trade remittance tax policy applicable to manufacturing export enterprises. It combines exemption, refund, and offset functions to maximize tax benefits for enterprises.

According to historical data, the tax exemption, offset, and refund policy has played a positive role in boosting market confidence and economic development:

Through the tax exemption, offset, and refund policy, enterprises can convert the value-added tax credit balance of exported goods into refundable amounts, thereby alleviating financial pressure. You need to ensure that your enterprise’s financial management system is robust and stay updated on policy changes to fully leverage this policy’s advantages.

Export Tax Refund Operation Process

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Enterprise Registration

Enterprise registration is the first step in the export tax refund operation process and the foundation for ensuring the smooth progress of subsequent steps. You need to complete registration with the tax authorities, submit relevant documentation, and ensure the accuracy and consistency of the information. The following are common document types and their specific requirements during the registration process:

In practice, enterprises often encounter issues such as inconsistent document information or fraudulent documents. According to statistics, the declaration process involves 809 common issues, which may lead to registration failure or refund delays. Therefore, you need to carefully verify document information to ensure consistency with actual business operations.

To improve registration efficiency, you can refer to the successful experience of the Ningbo tax authorities. They have optimized the process, reducing the refund processing time to 3 working days. This efficient operation model not only accelerates the refund receipt but also effectively enhances enterprise cash flow.

Customs Clearance of Goods

Customs clearance of goods is a critical step in the export tax refund process. You need to complete customs clearance procedures before exporting goods and ensure the completeness and accuracy of customs declaration documents. The main steps in the customs clearance process are as follows:

1. Prepare customs declaration documents, including invoices, packing lists, and transportation documents.
2. Submit the customs declaration application to the customs authority and undergo customs inspection.
3. Obtain the customs release document to ensure smooth export of goods.

During the customs clearance process, you need to pay special attention to the consistency between the documents and the actual goods. Inconsistencies may lead to the rejection of the tax refund application. Additionally, some countries and regions have special requirements for imported goods, so you need to research and prepare in advance.

Through efficient customs clearance operations, you can lay a solid foundation for subsequent tax refund applications. For example, in 2022, Ningbo Shidannu Group successfully handled a $360 million export tax refund by optimizing the customs clearance process, significantly improving the enterprise’s cash flow efficiency.

Document Organization

Document organization is an indispensable part of the export tax refund operation process. You need to classify, verify, and archive all documents to ensure the smooth progress of the tax refund application. The importance of document organization is reflected in the following aspects:

• Monitoring inventory levels: Timely recording of inbound and outbound situations helps you track inventory changes in real-time and avoid losses.
• Improving financial management efficiency: Clear records provide accurate data for financial statements, reducing financial risks.
• Enhancing customer service capabilities: Accurate inventory records improve order processing efficiency, ensuring timely fulfillment of customer needs.
• Promoting compliance: In certain industries, inbound and outbound documents are legally required compliance files, and proper organization can reduce legal risks.

To improve document organization efficiency, you can use professional document management software to automatically generate and archive relevant files. This not only reduces errors in manual operations but also saves significant time and costs for the enterprise.

Through comprehensive document organization, you can significantly improve the success rate of tax refund applications and provide strong support for the enterprise’s financial management and customer service.

Application Submission

Submitting the export tax refund application is a crucial step in the entire process. After completing document organization, you need to submit complete application materials in accordance with the requirements of the tax authorities. The main steps for submitting an application are as follows:

1. Log in to the tax authority’s export tax refund declaration system and fill in the relevant information.
2. Upload organized documents, including customs declarations, value-added tax invoices, etc.
3. Verify the accuracy of the declaration data to avoid delays due to errors.
4. After submitting the application, record the declaration number for subsequent progress tracking.

During the application submission process, common errors may affect the success rate of the tax refund. Below are some common issues and their potential consequences:

• Incorrect deletion of income data: Taxpayers delete income that should be declared, leading to fraudulent refund applications.
• Misreporting tax exemptions: Incorrectly filling in tax exemption amounts may lead to improper refund applications.
• Falsely increasing paid tax amounts: Exaggerating income and paid taxes leads to inaccurate refund applications.

To avoid these issues, you need to carefully verify all data to ensure that the declaration information is consistent with actual business operations. Using professional tax declaration software can help reduce human errors and improve application accuracy.

Tip: Before submitting the application, it is recommended to consult with a professional tax advisor to ensure all materials meet policy requirements. This not only improves the success rate of the tax refund but also saves time and costs.

Tax Review

The tax review is a core component of the export tax refund process. The tax authorities will conduct a comprehensive review of your application materials to ensure the legality and accuracy of the refund. The main contents of the review include:

• Document consistency: Verify whether the information in customs declarations, invoices, and foreign exchange settlement documents is consistent.
• Data authenticity: Check whether the declared data matches actual business operations and whether there are cases of over-reporting or under-reporting.
• Policy compliance: Confirm whether the applied refund items comply with current policy regulations.

During the review process, the tax authorities may request additional materials or further explanations. You need to respond promptly to ensure the smooth progress of the review process.

Note: If the tax authorities find significant issues with the application materials, they may reject the refund application or even impose penalties on the enterprise. Therefore, you need to take the review process seriously and ensure the authenticity and completeness of all materials.

To improve the review pass rate, you can follow these suggestions:

• Regularly update the enterprise’s financial and export records to ensure data accuracy.
• Use professional document management systems to reduce errors in manual operations.
• Maintain good communication with the tax authorities to stay informed about policy changes.

By implementing these measures, you can significantly improve the success rate of tax refund applications and provide strong support for your enterprise’s development.

Receipt of Refund

After completing the tax review, you will receive the refund amount. This is the final step in the export tax refund process and a critical stage for enterprise cash flow recovery. The refund amount is typically directly transferred to the bank account you provided, such as a Hong Kong bank account.

The time it takes to receive the refund depends on several factors, including the efficiency of the tax authority’s review and the bank’s processing speed. Generally, it takes 15 to 30 working days from application submission to receipt of the refund. If you choose an efficient declaration and review process, this time may be further shortened.

Tip: To ensure smooth receipt of the refund, you need to verify the bank account information in advance to avoid delays or losses due to account errors.

After receiving the refund, you can use the funds for the following purposes:

• Expanding production scale: Increase investment in production equipment or raw material procurement to enhance enterprise production capacity.
• Exploring overseas markets: Invest in market promotion activities to attract more international customers.
• Optimizing cash flow management: Alleviate financial pressure and improve enterprise operational efficiency.

By rationally utilizing the refund funds, you can inject new momentum into your enterprise’s development and further enhance competitiveness in the international market.

Calculation Method for Refund Amount

Calculation Formula

The calculation of the export tax refund amount must follow a clear formula to ensure accuracy and compliance. The commonly used calculation formula is as follows:
Refund Amount = FOB Price of Exported Goods × Refund Rate

In practice, you need to calculate based on the specific refund rate for the exported goods. The refund rate is typically determined by the tax authorities based on the type of goods and policy regulations. For example, some high-value-added products may have higher refund rates, while certain resource-based products have lower rates.

To improve calculation efficiency, you can use professional export tax refund software. Such software can automatically generate refund amounts, reducing errors in manual calculations. For example, Jiandaoyun software helps enterprises quickly complete tax refund declarations through automated functions, significantly improving work efficiency.

Influencing Factors

The size of the refund amount is influenced by various factors. The following are key factors:

• Policy factors: The value-added tax credit refund system and tax rate inversion directly affect the refund amount.
• Enterprise life cycle: Changes in sales volume at different stages of enterprise development can lead to fluctuations in the credit tax amount.
• Seasonal factors: Seasonal sales fluctuations may cause a decline in enterprise sales, affecting the accumulation of refund amounts.
• Enterprise-specific factors: Fixed costs and the value-added tax input tax amount from procurement also significantly impact the refund amount.

According to statistics, in 2022, China’s total tax credit refund amount reached 1.64 trillion USD. This data shows that the refund policy plays a significant role in alleviating enterprise financial pressure and promoting cash flow recovery.

Case Study

A certain export enterprise significantly improved operational efficiency by optimizing the refund process. The following are its specific implementation steps:

• Needs analysis: Identify the needs for refund calculation, declaration, and data analysis.
• Software selection: Choose Jiandaoyun as the export tax refund management tool.
• Implementation and training: Install the software and provide professional training to employees.
• Usage results: Achieve automated calculation and declaration of refund amounts, reducing errors in manual operations and improving decision-making efficiency.

Through this case, you can see that rational use of refund tools and policies can not only improve the enterprise’s cash flow efficiency but also provide more support for future business expansion.

Required Document Checklist

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When applying for an export tax refund, preparing complete documents is key to ensuring the success of the refund. The following are several essential document types and their specific requirements.

Customs Declaration

The customs declaration is one of the most important documents in the export tax refund application. It records the export information of the goods, including the product name, quantity, and amount. You need to ensure that the information on the customs declaration is entirely consistent with the actual export situation. The main contents of the customs declaration are as follows:

• Basic information: Includes the export enterprise name, product name, quantity, and amount.
• Customs release record: Proves that the goods have passed customs inspection and left the country.
• Document consistency: Ensures that the customs declaration matches the information on invoices, packing lists, and other documents.

Tip: Before submitting the customs declaration, carefully verify all information to avoid rejection of the refund application due to data errors.

Value-Added Tax Invoice

The value-added tax invoice is an important proof that the exported goods have paid value-added tax. You need to provide the value-added tax special invoice corresponding to the exported goods and ensure the accuracy of the invoice information. The key points of the value-added tax invoice are as follows:

• Invoice content: Includes the invoice number, issuance date, goods details, and tax amount.
• Invoice status: Ensure that the invoice has been certified by the tax authorities.
• Invoice consistency: The amount and goods information on the invoice must match the customs declaration.

Note: If the value-added tax invoice is not certified or the information is inconsistent, it may lead to the failure of the refund application.

Foreign Exchange Settlement Document

The foreign exchange settlement document is proof that the export goods have received foreign exchange payments. It is one of the important bases for the refund application. The main contents of the foreign exchange settlement document are as follows:

• Received amount: Consistent with the export contract amount.
• Bank records: Proof of receipt issued by the bank, such as records from a Hong Kong bank.
• Settlement status: Ensure that the settlement document has completed the foreign exchange settlement procedures with the foreign exchange management department.

Tip: Verify the received amount and settlement status in advance to avoid delays in the refund process due to foreign exchange issues.

By preparing complete customs declarations, value-added tax invoices, and foreign exchange settlement documents, you can significantly improve the success rate of the refund application and ensure the recovery of enterprise funds.

Other Documents

When applying for an export tax refund, in addition to customs declarations, value-added tax invoices, and foreign exchange settlement documents, you need to prepare other relevant documents. These documents are important supplementary materials to ensure the smooth approval of the refund application.

Transportation Documents

Transportation documents are important proof that the goods have been transported. You need to provide documents such as ocean bills of lading, air waybills, or land transportation documents. These documents record the transportation method, destination, and transportation time of the goods. The key points of transportation documents are as follows:

• Transportation method: Specify whether the goods are exported by sea, air, or land.
• Document completeness: Ensure that the document information is consistent with the customs declaration.
• Issuing authority: Transportation documents must be issued by a legitimate transportation company or agent.

Tip: Before submitting transportation documents, carefully verify the information to avoid delays in the refund application due to document errors.

Export Contract

The export contract is an important document proving the legality of the transaction. You need to provide a formal contract signed with the customer, which should include the goods’ name, quantity, amount, and delivery terms. The main requirements for the export contract are as follows:

• Contract terms: Specify the delivery time and location of the goods.
• Amount consistency: The contract amount must match the foreign exchange settlement document amount.
• Signatory information: Ensure that the contract is formally signed and stamped by both parties.

Note: The export contract is an important basis for tax authority reviews, and any inconsistencies may lead to the failure of the refund application.

Insurance Documents

Insurance documents are important materials proving that the goods are insured. You need to provide relevant documents for goods transportation insurance to ensure the goods are protected during transportation. The key points of insurance documents are as follows:

• Insurance coverage: Specify the types of risks covered, such as damage or loss of goods.
• Insurance amount: Ensure that the insurance amount matches the value of the goods.
• Insurance company information: Choose a reputable insurance company, such as a Hong Kong insurance company.

By preparing complete transportation documents, export contracts, and insurance documents, you can significantly improve the success rate of the refund application. These documents not only prove the legality of the transaction but also provide strong support for tax reviews.

Common Issues and Precautions

Reasons for Rejection

During the export tax refund application process, rejection is often due to data entry errors, incomplete documentation, or misunderstandings of the policy. The following are common error types and their descriptions:

According to research, the average data entry error rate is 1%. For large enterprises, this may result in a large number of erroneous data, affecting the success rate of refund applications. Human and system factors are the main causes. You need to strengthen the data entry review mechanism to ensure accurate information.

Tip: Before submitting the application, it is recommended to use professional tax management software for data validation to reduce the occurrence of human errors.

Misunderstandings about Refund Scope

Many enterprises have misunderstandings about the scope of export tax refunds. For example, some enterprises mistakenly believe that all exported goods are eligible for tax refunds. In reality, the following situations do not qualify for refunds:

• Policy-adjusted goods: Goods such as crude oil and timber have had their refund qualifications canceled.
• Goods with reduced refund rates: For example, unrefined aluminum and coke have refund rates reduced to 8% and 5%, respectively.
• Non-actual exported goods: Goods that have not gone through customs clearance or have not actually left the country.

You need to carefully study the latest policy documents issued by the Chinese tax authorities to ensure that exported goods meet the refund conditions.

Note: Policies change frequently, so it is recommended to regularly follow announcements from the tax authorities to avoid refund failures due to policy misunderstandings.

Strategies for Handling Reviews

The tax review is a critical part of the export tax refund process. To improve the review pass rate, you can adopt the following strategies:

• Optimize service processes: Simplify internal operation steps to reduce data processing time.
• Establish feedback mechanisms: Regularly collect review feedback from tax authorities to improve application materials.
• Improve risk management systems: Ensure all documents and data comply with policy requirements to avoid refund failures due to inconsistencies.
• Customized services: Develop tailored refund declaration plans for different types of goods to improve efficiency.

The success case of China Merchants Bank shows that optimizing processes and establishing feedback mechanisms can significantly improve service quality. By reducing waiting times and improving risk management systems, enterprises can not only increase the success rate of refund applications but also enhance customer satisfaction.

Tip: Collaborate with tax advisors to regularly review your enterprise’s refund process to ensure compliance with the latest policy requirements.

The export tax refund injects strong momentum into enterprise development. By reducing the tax burden, you can effectively enhance competitiveness in the international market and optimize cash flow efficiency.

Tip: Standardized operations are key. Strictly preparing documents and application materials in accordance with policy requirements can significantly improve the success rate of tax refunds.

The importance of the full-process operation cannot be overlooked. From enterprise registration to receiving the refund, every step requires precise execution. By leveraging professional tools and team support, you can ensure an efficient and smooth process, fully utilizing policy benefits to create more opportunities for enterprise development.

FAQ

1. Why might an export tax refund application be rejected?

Common reasons for rejection of export tax refund applications include:

• Inconsistent document information, such as discrepancies between customs declarations and invoice amounts.
• Data entry errors, such as spelling or format issues.
• Failure to submit the application within the specified time limit.

Tip: Before submitting the application, carefully verify all documents and data to ensure compliance with policy requirements.

2. How is the refund rate for export tax refunds determined?

The refund rate is determined by the Chinese tax authorities based on the type of goods and policy regulations. High-value-added products typically enjoy higher refund rates, while resource-based products have lower rates.

Note: Regularly follow the latest refund rate database issued by the tax authorities to ensure the use of the correct refund rate during declaration.

3. Can a refund be applied for if documents are lost?

Lost documents may affect the refund application. You can try the following solutions:

• Contact relevant authorities to reissue documents, such as customs or banks.
• Provide other supporting materials, such as transportation records or customer confirmation letters.

Tip: Properly store documents and use document management software to reduce the risk of loss.

4. How long does it typically take to receive the refund?

The refund receipt time is typically 15 to 30 working days, depending on the efficiency of the tax review and the bank’s processing speed.

Tip: Verify bank account information in advance to ensure accuracy. For example, Hong Kong bank accounts need to provide complete payment information.

5. How can the success rate of refund applications be improved?

You can improve the success rate of refund applications through the following methods:

• Use professional tax declaration software to reduce human errors.
• Regularly update enterprise financial and export records to ensure data accuracy.
• Collaborate with tax advisors to optimize the refund process.

Note: Strictly prepare documents and application materials in accordance with policy requirements to avoid refund failures due to inconsistencies.

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