VAT Export Exemption and Refund

Various goods are entitled to tax exemption and refund upon export. The exemption refers to the fact that the goods when exported will not attract VAT. The refund refers to the entitlement to obtain a rebate on such goods for the VAT paid previously in the supply chain. As the goods have now been exported, the exporting company is entitled to a rebate for the VAT built into the price they ultimately paid for the goods. The entitlement to the tax exemption and refund depends upon the goods being exported. Some goods may be entitled to both, some goods may only be entitled to the exemption and some goods may be entitled to neither. Goods falling into the second category are usually those that do not attract VAT as domestic sales and therefore on export there is not entitlement to a refund. Goods falling in the final category are essentially natural resources at the government wishes to protect from commercial exploitation, such as crude oil and accordingly does not wish to promote export in.

To obtain the exemption, the goods must be exported via the production enterprise or through an import/export company with an export license. The tax refund rates depend upon the type of goods being exported. Generally, the VAT refund rate will be 13% or 17% but some goods have a rate of 5%.

VAT Exempted Products

The following items shall be exempted from the VAT:
1. self-produced agricultural products sold by agricultural producers;
2. contraceptive medicines and devices;
3. antique books;
4. apparatus and equipment imported and directly used for scientific research, experiment and teaching;
5. imported materials and equipment from foreign governments and international organizations as gratuitous aid;
6. articles exclusively for persons with disabilities that are directly imported by organizations of persons with disabilities; and
7. self-used articles sold by the seller.