For exporters in China, indirect taxes paid during the
production and distribution process can be refunded. Specifically,
exporters are eligible for rebates on value-added tax
('VAT') and consumption tax ('CT') incurred
during the production process.
Often export rebate policies are adjusted according to the
current economic circumstances to support and promote exports. For
example, since March 2020 the VAT refund scope was increased to
1464 products, with a 13% tax rebate rate for 1,084 items and a 9%
tax rebate rate for 380 products.
Though the export rebate process has been streamlined and
simplified during the past years. Companies should
establish robust and responsive internal controls to ensure
preferential export tax rebate policies are leveraged
properly. Without comprehensive management, especially for
supply chains, companies could be exposed to delays and losses,
which may snowball out of control. We recommend the following best
practices to risk
