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Fresh Move to Improve Export Tax Rebate Management

The State Administration of Taxation (SAT) revised and promulgated on 28 July the Measures for the Management of Export Tax Rebate (Exemption) Enterprises by Category. Starting from 1 September this year, export enterprises will be subject to differential management by the SAT. Priority will be given to processing export tax rebate applications from Category 1 enterprises and their claims will be settled within five working days.

The new measures further clarify the criteria for the classification of export enterprises. Export tax rebate (exemption) enterprises are classified into four categories through assessments on their grade of tax-paying creditworthiness, tax compliance and net assets, etc.

For instance, the new measures establish the respective evaluation criteria for three types of Category 1 enterprises, namely production enterprises, foreign trade enterprises and comprehensive foreign trade service enterprises. All export companies classified as Category 1 enterprises must have a tax-paying credit rating of A or B, have a sound export tax rebate (exemption) risk control system in place, have not committed such acts as issuing false VAT invoices or other VAT deduction vouchers, cheating for export tax refund, etc over the past three years. Given the asset-light characteristic of comprehensive foreign trade service enterprises, the ratio of net assets (at year-end) to total amount of tax rebate (exemption) claimed in a given year has been lowered from over 100% to over 30%. Meanwhile, such enterprises should either be an Advanced Certified Enterprise or a General Certified Enterprise under the Customs’ enterprise credit management system, and should achieve Grade A in terms of foreign exchange management by category.

According to an official in charge of the SAT's Department of Goods and Labor Tax, the new measures make clear that five types of enterprises whose tax-paying credit rating is Grade C or has yet to be evaluated will be classified as Category 3. Nine types of enterprises which have a tax-paying credit rating of Grade D, which are identified as dishonest companies subject to joint punishment by multiple state authorities, and which are identified as dishonest companies under the Custom's enterprise credit management system, will fall into Category 4. In short, management by category allows the SAT to supervise the established enterprises more effectively, while setting up examples for the new comers to follow.

The new measures also stipulate that the export enterprise management category evaluation exercise should be conducted once every year and completed within a month following the confirmation of the enterprise’s tax-paying credit rating results.

For export tax rebate (exemption) requests filed by eligible Category 1 export enterprises, the state taxation authority should, after examining the application, complete the tax rebate (exemption) formalities within five working days starting from the date of acceptance of the application.

For details of the Measures for the Management of Export Tax Rebate (Exemption) Enterprises by Category in Chinese, please see:


Content provided by Picture: HKTDC Research
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