Guide To Tax Refund In China
China started the tax refund program in July 2015. Not all stores are participating this program, but many does especially the big stores that are located in large cities. If you are going to shop in China, here is how you can apply for tax refund.
What is Zēng Zhí Shuì?
Zēng zhí shuì translates in China VAT. VAT means value added tax – it’s tax imposed on goods and services. People who live outside of China can get this tax back when buying goods. The VAT rate in China is 17%.
Who are eligible to apply for tax refund?
People with permanent resident outside China – so basically travellers and tourists. People with permanent resident in Hong Kong, Macau and Taiwan can also apply for tax refund. But they cannot stay in China for more than 183 days consecutively.
The rule is you need to purchase at minimum ¥500 CNY (around $75 USD) in one tax free store on any day by one tourist.
Time limit for Customs Approval
From the day of purchase, your goods need to leave China within 90 days.
Cities that have adopted the tax refund program
There are only a handfull of cities in China that have adopted the tax refund program. There will be more in the future, but for now, you can shop tax free here:
- Chengdu of Sichuan
How to claim Tax Refund in China? A step by step instruction
1. At the store: can you get tax refund here?
Ask the Shopping Assistant whether they participate to the tax refund program or look for the ‘Tax Free’ sign in or outside the store. For now, there are only limited cities and stores joining this program, but it covers the big shopping malls.
2. At the check out: the Tax Refund Form
Before you pay, let the staff know that you are going to apply for tax refund. They will give you a Tax Refund Form; you will need to complete this form. Ask the staff for assistant if you need help.
“The tax refund rate is 11%, but 2% will be charged as service fee for processing your application. Therefore the total tax refund is actually 9%.”
3. Take the receipts and put all the documents safe
Don’t forget to take the original receipts with the Tax Refund Forms and put them in a safe place.
“If you have got all your documents prepared, then the process from the custom check to the tax refund counter will only take you 3 – 5 minutes.”
4. When you are going to leave China: search for the customs at the departure port
To get your tax refund, you need the custom’s approval. Find the customs office and present the following documents:
- Completed Tax Refund Forms
- Original invoices
- Purchased goods/ID
After the qualification, the custom will put the necessary stamps on your Tax Refund Forms.
5. Find the Refund Counter and show them all your documents including the stamped Tax Refund Forms
6. The payment options
There are only two choices to get your money back. One is cash, which is limited and the other is bank transfer.
- Cash: you can get cash back, but it’s only to maximum ¥10.000 CNY, which is approximately $1500 USD. Any tax refund above ¥10.000 CNY will be transferred via banking
- Bank transfer: you can always choose bank transfer. But if your total tax refund amount is higher than ¥10.000 CNY (around $1500 USD), then only bank transfer is permitted.
Tax refund overview in China
|Value||Tax Refund in CNY||Tax Refund in %|
|¥2000 CNY||¥180 CNY||9.00%|
|¥4000 CNY||¥360 CNY||9.00%|
|¥8000 CNY||¥720 CNY||9.00%|
|¥16000 CNY||¥1440 CNY||9.00%|
|¥24000 CNY||¥2160 CNY||9.00%|
|¥32000 CNY||¥2880 CNY||9.00%|
|¥40000 CNY||¥3600 CNY||9.00%|
|¥48000 CNY||¥4320 CNY||9.00%|
|¥56000 CNY||¥5040 CNY||9.00%|
|¥64000 CNY||¥5760 CNY||9.00%|
|¥72000 CNY||¥6480 CNY||9.00%|
|¥80000 CNY||¥7200 CNY||9.00%|