Foreign trade tax rebate is a preferential tax policy implemented by China to encourage exports. To put it simply, when an enterprise exports its products abroad, the state will refund part or all of the taxes paid by it in domestic production and circulation to the enterprise, thereby reducing the export cost of the enterprise and improving its competitiveness in the international market. The following is a detailed description of China's foreign trade tax rebate process and methods:
1.Preparation before filingAfter obtaining the documents approved by the relevant departments to operate the export products business and the industrial and commercial registration certificate issued by the administrative department for industry and commerce, the enterprise shall go through the tax refund registration of the export enterprise within 30 days.
2.Application and acceptance: Foreign trade enterprises must declare to the tax refund department for tax refund (exemption) of export goods within 90 days from the date of export declaration of goods. When declaring, the enterprise shall provide relevant information such as the customs declaration form for export goods, the verification form for export receipts, and the special VAT invoice.
3.Review & ApprovalThe tax refund department will review the tax refund information declared by the enterprise, including whether the documents are true, complete and valid, and whether the contents between them are consistent. After the review is correct, the tax refund department will sign the audit opinion and report to the higher tax authority for approval.
4.Apply for a tax refundAfter approval, the tax refund department will issue an "income refund letter" to the enterprise, and the enterprise will go to the bank to go through the tax refund procedures.
There are two main ways to rebate foreign trade: tax refund exemption and credit tax refund.
1.No tax refund: It means that when a foreign trade enterprise exports self-produced goods or treats them as self-produced goods, it is exempted from value-added tax and consumption tax in the export link, and the value-added tax paid when purchasing the goods is refunded. This method is mainly suitable for foreign trade enterprises that do not have production capacity.
2.No credit or refund: It means that when a manufacturer exports self-produced goods, it is exempted from value-added tax and consumption tax in the export link, and at the same time, the input tax of its exported goods is used to offset the tax payable on domestic goods. If the input VAT is insufficient to offset the tax payable on the goods sold domestically, the shortfall will be refunded by the state. This method is mainly suitable for production enterprises with production capacity.
1.Timely declaration: Enterprises should declare tax refunds within the specified time, and late declarations may result in the inability to refund or a reduction in the amount of tax refunds.
2.The documents are completeWhen declaring tax refund, enterprises should provide complete and valid documents, such as customs declaration forms for export goods, verification forms for export receipts, special VAT invoices, etc. Incomplete or invalid documentation may result in a failed refund.
3.ComplianceEnterprises should strictly abide by the provisions of the national export tax rebate policy and shall not use false means to defraud the tax rebate. Violations are subject to severe penalties if they are discovered.
4.Keep an eye on policy changesThe country's export tax rebate policy may be adjusted according to the economic situation and changes in the international market environment. Enterprises should pay close attention to policy developments and adjust their business strategies in a timely manner to adapt to policy changes.
In short, foreign trade tax rebate is a complex work that requires enterprises to have professional knowledge and rich experience. Enterprises should fully understand the tax refund policies and procedures, and operate in accordance with the prescribed requirements to ensure the smooth progress of the tax refund work.