VAT Refunds for China-based Manufacturers Contracting Overseas

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Oct. 21 – The State Administration of Tax has issued Guoshuihan [2009] No. 538 concerning treatment of export VAT refunds (exemptions) on overseas contracted projects carried out by manufacturing enterprises.

According to the circular, a manufacturing enterprise with VAT general taxpayer status exporting goods of its offshore contracted projects is entitled to the following treatments:

  • The “exempt, offset and refund” policy shall apply on both self-produced goods and non-self produced goods, provided that such goods qualify for tax preference under current regulations and that the export transaction is recorded as sales for accounting purposes
  • VAT will be levied if the goods are specifically disallowed for VAT exemption (refund) under current regulations
  • Exports of other goods, including personal effects, will be given VAT exemption

For advice of tax exemptions or refunds in China, please contact Sabrina Zhang, the national tax partner for Dezan Shira & Associates at