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Beijing Offers 11% VAT Refund for Overseas Visitors from 1 July

Beijing took the lead in offering departing overseas visitors VAT refund for their purchases in China, at a rate of 11%. The Beijing Municipal Commission of Commerce has recently announced 15 measures to promote steady growth in consumption including the departure tax refund and the possibility of extending to Beijing the preferential policies practised in the Tianjin Free Trade Zone.

According to the Beijing Municipal Commission of Commerce, the tax refund measures for departing visitors took effect on 1 July. Except for items prohibited or restricted from exit by the state and of VAT exemption, the same overseas visitor making purchases on the same day in the same designated Tax Free shop for an amount not less than Rmb500, the tax refundable items have not been used or consumed, the departure date of the tourist does not exceed 90 days from the purchase of the tax refundable items, and the refundable items are carried by the overseas visitor or with checked-in baggage when he or she leaves China, can claim VAT refund at 11% of the invoiced amount of the tax refundable item.

Commercial enterprises eligible to become designated Tax Free shops must meet five requirements including being a general taxpayer and having a tax credit rating of level B or above, and foreign visitors need to present the receipts when claiming for tax refund. About 80 companies in Beijing have filed for records at state taxation authorities for applying to be designated Tax Free shops and more applications are expected.

At the end of this year, the Municipal Commission of Commerce and various departments in tourism, industry and commerce administration will jointly launch the first batch of trusted shops servicing domestic and foreign tourists. Trusted shops logo centrally developed by government departments or relevant trade associations will be posted to create a safe and secure feeling for consumption. Voluntary declaration by companies helps strengthen self-discipline of industries, encouraging consumption by domestic and foreign tourists in Beijing.

In addition, the Municipal Commission of Commerce will also implement this year the Beijing-Tianjin-Hebei joint development strategies to accelerate the integrated development of the three markets in Beijing, Tianjin and Hebei, and to explore the extension of Tianjin Free Trade Zone ​​preferential policies to Beijing, to expand sales of imported goods, to build a platform for famous special brand goods from out of town for entering the market of the capital and to enrich its consumer market.

The 15 measures announced by the Municipal Commission of Commerce also include: support for department stores, long-established stores, supermarkets, shopping malls and other traditional retailers offering online shopping experience area; encouraging traditional retail enterprises to carry out online marketing activities via third-party platforms with up to 50% of the related costs eligible for funding support; support e-commerce businesses to set up physical experience shop with up to 50% of the related costs eligible for funding support; guide e-commerce businesses to organise off-line promotional activities with up of 50% of the costs related to platform construction, publicity materials and building Wi-Fi access eligible for funding support.

Content provided by Picture: HKTDC Research
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