Mar. 18 – The State Administration of Taxation has recognized the cash flow difficulties some export companies may have, resulting in delayed export remittance verification forms for the purposes of balancing input and output VAT, and issued a new circular to address the problem.

Guoshuihan [2010] No. 89 details two situations in which export companies that have postponed the submission of their export verification forms are now allowed to refund (exempt) the export VAT.

1. Export VAT refund (exemption) can be granted if no errors are identified on the application certificates, documents and information of export VAT refunds during the inspection procedures of the relevant tax authorities
2. Export companies under the trial period of submission of export remittance verification forms using the electronic system and experiencing transmission difficulties may also have export VAT refund (exemption) granted if no errors are identified is the submission of pertinent documents as above

These measures may assist smaller VAT taxpayers with cash flow concerns.

For further information, please contact Sabrina Zhang, the national tax partner for Dezan Shira & Associates at tax@dezshira.com.