8 May 2015
Beijing to Offer VAT Refund to Tourists
Beijing is set to offer VAT refund to tourists this year in a bid to boost tourism. Foreign tourists are eligible for a rebate of 11% on consumer goods purchased at designated VAT refund shops at the ports of departure.
"Beijing is one of the first Chinese cities to offer VAT refund to departing foreign tourists", said an official of the Beijing Municipal Commission of Tourism Development. The Commission is working on the details with the tax authorities to ensure that this scheme gets off the ground this year.
The tourist tax refund policy is a policy that allows foreign tourists to obtain a refund of VAT on goods purchased at designated VAT refund shops. Here, foreign tourists refer to foreigners and those from Hong Kong, Macau and Taiwan who have not spent more than 183 days consecutively on the Chinese mainland. The ports of departure are ports in the areas implementing the tourist tax refund policy, which are formally open to foreign tourists and have tax refund agencies. These ports include airports, sea ports and land ports.
To be eligible for VAT refund, a foreign tourist must satisfy all of the following criteria: The amount of tax refundable items purchased by the same tourist from the same designated VAT refund shop on the same day reaches Rmb500. The tax refundable items have not yet been opened or consumed. The tourist has purchased the tax refundable items for not more than 90 days before he or she leaves China. The purchased tax refundable items are carried by the tourist himself or herself or with his or her checked-in baggage when he or she leaves China. The tax refund rate for tax refundable items is 11% and the tax refund is calculated according to this formula: Tax refund = invoiced amount of the tax refundable item (VAT inclusive) x tax refund rate.
What merits attention is that not all items are eligible for tourist tax refund. "Tax refundable items" are personal items that meet the eligibility criteria purchased by the foreign tourist himself or herself at designated VAT refund shops but do not include items eligible for VAT exemption policies purchased at these designated shops, or items listed on the List of the PRC of Articles Prohibited from Import and Export and the List of the PRC of Articles Restricted from Import and Export.