How to Get A Tax Refund in China
When traveling to China, besides sightseeing and enjoying delicious food, shopping is a major part of many people’s itineraries. After shopping and preparing to return home, don’t forget about the money you can get back – the tax refund. Simply put, overseas tourists who buy things at tax-refund stores in China can get a portion of the value-added tax (VAT) back when leaving the country. Please accept this practical tax refund guide to save you money.
1. What is a Tax Refund in China for Departure?
A tax refund for departure refers to the policy of refunding value-added tax (VAT) on goods purchased by overseas travelers at tax-refund shops when they depart from the country. This is equivalent to the government refunding a portion of the tax you pay when you buy things in China. According to current policy, the tax refund rate for general goods is 11%. After deducting a 2% handling fee for the tax refund agency, the actual amount you receive is 9%. For example, if you buy a piece of clothing for 1000 yuan, you will receive 90 yuan back.
2. What Are the Conditions for a Tax Refund in China?
Not just any purchase will qualify for a tax refund. You must meet the following conditions:
Identity Requirements
You must be an overseas visitor. “Overseas visitors” refer to foreigners and compatriots from Hong Kong, Macau, and Taiwan regions of China who reside in China’s mainland for no more than 183 consecutive days before the date of departure. Overseas visitors hold a credit card of his/her own with an operational pre-authorization guarantee.
Amount Requirement
A single overseas traveler must spend at least 200 RMB at the same tax-refund store on the same day. Based on the recent exchange rate, this is approximately equivalent to US$29.
Time Requirements
The purchase must be made within 90 days (inclusive) of the date the purchase order is placed. The departure date must be no more than 183 days prior to the entry date.
Item Requirements
Purchased tax-refundable items must be carried by the purchaser in person or checked in as baggage upon departure from the country. The items must not have been used or consumed at the time of departure.
Location Requirements
You must shop in an area that implements the tax refund policy for departing tourists. Currently, the tax refund policy covers the vast majority of provinces in China, including 28 provinces, autonomous regions, and municipalities such as Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu, Zhejiang, Sichuan, Yunnan, Hainan, and Xinjiang. You can only apply for a tax refund if you shop at designated tax refund stores in these areas. You cannot receive a tax refund if you shop in an area that does not yet implement the tax refund policy.
3. What Items Are Ineligible for Tax Refunds?
According to regulations, the following categories of goods are not eligible for tax refunds upon departure:
- Items prohibited or restricted from export as listed in the “List of Prohibited Items for Import and Export of the People’s Republic of China” and the “List of Restricted Items for Import and Export of the People’s Republic of China.”
- Items sold in tax-refund shops that are eligible for VAT exemption
- Other items stipulated by the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation
What’s more, items such as gold and silver and their products, national currency, precious cultural relics, and endangered animals and plants and their products are not eligible for tax refunds.
4. Tax Refund Process in Three Steps
The entire tax refund process consists of three simple steps. Just follow the instructions.
Step 1: Keep Your Receipts After Shopping
When purchasing items at a tax-refund store, remember to ask the staff for two things after payment:
- Sales Invoice: This is your receipt for the purchase.
- “Departure Tax Refund Application Form”: This is the key document for the tax refund, containing product information, amount, tax, etc.
After receiving it, check that the information is correct, especially your passport number and name spelling. Currently, there are over 10,000 tax-refund stores in China, covering more than 20 provinces and municipalities. These stores usually have signs saying “Tax Free” or “Tax Refund Store” at the entrance. They are very easy to spot.
Step 2: Customs Verification Upon Departure
When you arrive at the airport, train station, or port of entry and are ready to depart, don’t rush to check your luggage. Take the following items to the customs declaration counter:
- Tax-refund items. Be sure to carry these with you; do not check them in.
- “Departure Tax Refund Application Form”
- Sales invoice for the tax-refund items
- Your valid identification document (passport, etc.)
Customs officers will verify the items and documents. After confirming that everything is correct, they will stamp the “Departure Tax Refund Application Form.” Once this step is completed, you can proceed to check your luggage and go through security.
Step 3: Collect Your Tax Refund at the Departure Area’s Tax Refund Counter
After passing through security and entering the departure area, find the tax refund agency’s window and submit the following documents:
- Your valid identification document (passport, etc.)
- The “Departure Tax Refund Application Form” verified and stamped by customs
- The sales invoice for the tax-refundable goods
After the staff calculates the refund, they will refund you. For tax refunds under 20,000 RMB, you can choose cash or bank transfer; for amounts exceeding 20,000 RMB, only bank transfer is available. The currency for the tax refund is RMB.
5. How Is the Tax Refund Calculated?
The formula for calculating the tax refund is as follows:
Actual tax refund amount = Sales invoice amount of tax-refundable goods upon departure (including VAT) × [Tax refund rate – Tax refund agency handling fee]
Currently, the tax refund rate for general goods is 11%, and the tax refund agency charges a 2% handling fee, so the actual refund is 9%. For example, if you bought a product worth 2000 yuan, the actual tax refund amount = 2000 × (11% – 2%) = 2000 × 9% = 180 yuan. If you purchased certain specific goods (such as food, beverages, etc.), the tax refund rate may be 8%, subject to the information provided by the tax-refund store.
6. Latest Facilitation Measures
China has introduced several measures to facilitate tax refunds for departing tourists, making refunds faster and simpler.
Lower Thresholds, Higher Amounts
The tax refund threshold has been lowered from 500 yuan to 200 yuan. The cash refund limit has been increased from 10,000 yuan to 20,000 yuan.
Instant Refunds
More than 7,000 stores nationwide now support “instant refunds.” This means you can process your tax refund directly when you make your purchase. The tax will be refunded to you on the spot (via Alipay, etc.). When leaving the country, simply present your electronic tax refund code at customs. No need to visit a tax refund window.
Mobile Tax Refunds
Shanghai has pioneered the “Tax Refund Service” online platform. It supports multiple languages, including Chinese, English, Japanese, and Korean. You can register and apply for a tax refund online. Once approved, the money will be deposited into your bank account or Alipay account. The platform’s website is https://taxrefund.sheca.com/login
Tips for Tax Refund in China
Confirm Location: First, confirm whether your city or province implements the tax refund policy for departing tourists. Currently, it covers 28 provinces, autonomous regions, and municipalities nationwide, but a few areas still do not.
Find the Right Store: Look for stores with “Tax Refund” or “Tax-Free” signs. Not all stores offer tax refunds.
Single-Item Purchases on the Same Day: Under the new policy, you can get a refund if you spend over 200 RMB at the same store on the same day. You can check out with friends or buy all your items at one store in one day.
Do Not Open Packages: Do not open or use the tax-refundable goods before departure, as customs will verify them.
Allow Ample Time: At the airport, complete customs verification before going through security. Do not check in your tax-refundable items.
Instant Refund: If the store supports this, getting the refund on the spot is the most convenient. Simply show your electronic tax refund code upon departure.
Large Refunds via Bank Transfer: Refunds over 20,000 RMB can only be processed via bank transfer. Remember to prepare your bank card information in advance.
Large Refunds via Bank Transfer: Refunds exceeding 20,000 RMB can only be processed via bank transfer. Remember to prepare your bank card information in advance. If you have any questions, contact customer service: The staff at the tax refund window usually speak basic English, and there is also a customer service portal on the app.
Conclusion
Getting a tax refund in China isn’t actually that complicated. First, confirm that you’re shopping in an area that offers tax refunds. Then, collect your receipts from the store, have them checked by customs upon departure, and collect your refund at the counter in the departure area—it’s that easy! When shopping in China, pay attention to the tax refund signs to make sure you get your money back.
If you’re planning a trip to China and want a smoother, more authentic experience, feel free to contact Tattle. Our professional team can handle everything from itinerary design and accommodation arrangements to transportation and tax refund guidance. Whether you want to visit bustling cities or remote towns, we can customize a trip that lets you travel with ease and shop with confidence. We hope this guide helps you get your tax refund smoothly, and we look forward to exploring this vast land with you.
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