China’s SAT Adjusts Declaration Measures for Export Tax Refunds

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Oct. 25 – China’s State Administration of Taxation released the “Announcement on Adjusting the Declaration Measures for Export Tax Refunds (SAT Announcement [2013] No.61, hereinafter referred to as Announcement)” on October 15, which is scheduled to take effect on January 1, 2014. Detailed information can be found below.

According to the Announcement, for exported goods and labor services, as well as taxable services subject to zero-rated value-added tax, enterprises shall file for pre-declaration with the competent tax authority according to the existing declaration measures. After obtaining confirmation from the tax authority, enterprises shall submit the documents and certifications for tax refund (exemption), along with relevant electronic data to the competent tax authority for formal declaration.

After receiving the tax refund declaration application, the tax authority shall inform the enterprises about the reviewing results in a timely manner. Where the tax authority discovers that the contents of the tax refund certificates are inconsistent with the electronic information provided by the administration authorities, the affected enterprise shall:

  • Where the inconsistency is caused by typing mistakes, the enterprise shall file for pre-declaration again after correcting relevant mistakes;
  • Where the inconsistency is caused by improper operations during the customs declaration process of exported goods though the ‘China E-port Export Tax Refund System’ or the authentication process of special VAT invoice, the enterprise shall file for pre-declaration again after correcting relevant mistakes; and
  • Where the inconsistency is caused by other reasons, the enterprise shall fill in the ‘Application Form on Inquiry of Enterprise Information’ and submit the original certificate and inconsistent data to the competent tax authority.

Enterprises shall calculate the amount of tax that is not allowed to be deducted, exempted or refunded based on the export sales revenue declared in the formal application and fill such information in the “Attached Materials of Value-Added tax Declaration Form II” of the current period.

Where the enterprise fails to file pre-tax declarations before the export tax refund declaration deadline due to data inconsistency, it shall provide the following materials to the competent tax authority before the deadline:

  • Application Form on Non-Existence of Relevant Electronic Information for Export Tax Refunds and relevant electronic data; and
  • Certificates and documents for tax refund declaration.

Where the tax authority finds that the tax refund certificates and documents submitted by the enterprises are complete and the contents of the application form and relevant certificates are consistent, the formal tax declaration period for such enterprises shall not be subject to the declaration deadline. However, if the above-mentioned contents are inconsistent with each other, the enterprises are not allowed to file tax refund declaration after the deadline.

Moreover, the Announcement does not apply to the following production enterprises:

  • Production enterprises exporting goods and labor services;
  • Production enterprises processing goods with imported materials for re-export purposes; and
  • Production enterprises processing exported goods with tax-exempted raw materials purchased domestically.

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