VAT rebate in China: Reclaim on sales to China?

VAT rebate in China Reclaim on sales to China

Jose wrote in with and interesting question about how the VAT rebate in China is processed on goods that are imported into the mainland. My focus is on exporting out of China, but as I deal in VAT everyday, I offered the following comments to Jose. I welcome feedback to confirm if my assessment is accurate.

Jose writes:

I would like to import China Espresso Making machines and Coffee from Italy.
Can your office provide import agent and logistics services?
My main question that I would like to ask of you is that when the Import Duty and the VAT is paid during the importation process at what point if any can I get a VAT Rebate?
I have been informed that I can get a VAT Rebate when the product is sold in the Chinese market, Is that correct? Please, help me clarify this point. Thank you in advance for your assistance.

My response:

While our niche at PassageMaker is helping buyers source products from China, our import-export license can be used to import products into China and manage the logistics. Can you give me some idea as to the scale of your coffee project (for example, do you already have buyers and steady orders, or just getting started?) and I would be happy to put the right person in touch with you from my organization to talk about how we can be of service.

Regarding the VAT, you are correct that import duty and VAT is paid upon importation into China. I am afraid that whoever told you that you can get a VAT rebate when the products are sold in China did not give accurate advice. But China is a big place and the laws change, so perhaps the person that gave you that advice knows something that I don’t. The following is my understanding, but if your advisor knows different, please let me know as I too would like to stay up to date.

As I understand it, the VAT rebate is applied for when good leave China. For example, if you were a China based legal entity (fully licensed to do trading and process VAT) and imported coffee and machines into China from your supplier in Italy, then sold the items to buyers outside of China, then MAYBE there could be some VAT rebate. But in the situation you describe above where you are selling to the China market for end use in China, there is no VAT rebate that I am aware of.

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