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Overseas Tourist Tax Rebate Scheme Expands

China will implement tax rebate scheme for overseas tourists visiting Liaoning, Anhui, Fujian, Sichuan, Tianjin and Xiamen from 1 January 2016 following on the heels of Beijing and Shanghai, according to an announcement released by the Ministry of Finance (MOF)’s Tax Policy Department.

Under the scheme, overseas visitors can enjoy value-added tax refunds on their purchases in designated duty-free stores on departure, allowing tax collection in the place where consumption for the value-added tax occurred in accordance with international practice.

Analysts said that with faltering growth in the Chinese economy, China decides to broaden the tax rebate policy to promote inbound tourism and boost domestic consumption, giving impetus to economic growth.

First launched in Hainan province on a pilot basis on 1 January 2011, the scheme has expanded to different parts of the country where the right conditions are present. From airports, it has also been extended to maritime and land ports.

According to circulars released earlier by MOF, foreign tourists as well as visitors from Hong Kong, Macau and Taiwan who have stayed on the mainland for no more than 183 days are eligible for an 11% rebate on consumer goods purchased at designated duty-free stores. The minimum purchase for a value-added tax refund is Rmb500 in any one store in a day.

Content provided by Picture: HKTDC Research
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