Processing VAT Rebate in China

Maximize Your VAT Tax Refund, Reduce Headaches & Avoid Costly Processing Errors

Manufacturing in China and Exporting Your Products or Goods? You’re Most Likely Eligible for a VAT Rebate.

While VAT rebates on exports are far from new, many companies manufacturing in China are not yet aware of the intricacies of who or what is eligible for a VAT rebate, and when.

This is especially true for companies who’re outsourcing their manufacturing to a local partner, or buying components or materials from local suppliers.

While not absolute, it can be fairly common that these local partners and suppliers will gain the rebate for themselves, not passing on the saving to you and thereby increasing your costs and that of your customers.

Why Vendors Try to Use VAT to their Advantage

If you don’t know the VAT rebate amount, then you don’t really know your vendor’s true pricing. This can complicate negotiations and vendor comparisons. The vendor may be pocketing the VAT rebate without explaining it, thereby inflating your costs!

Why Local Manufacturing Partners Try to Use VAT to their Advantage

Many Chinese companies lack import-export rights and proper China VAT processing facilities but never disclose this. They are forced to use 3rd party trading companies to handle your export and VAT rebate which inflate the price, complicate the relationship, and leak your proprietary information. This can often happen without your knowledge, with the net result being your costs increasing and your IP being at risk!

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How PassageMaker Can Protect You With VAT Rebate Processing

PassageMaker have been manufacturing, exporting, and processing VAT rebate in China for 2 decades. Unlike many local partners who’d turn to yet another local trading company to handle your private affairs without you even knowing, we are US run, but have our own China VAT processing operation.

By working with us to handle your VAT rebate processing, we consult you in plain English, examining and understanding in great detail your exact business position with regards to VAT, your suppliers, products, and company structure.

Most projects follow the following steps:

Document Review
Communications with Customs Bureau and Vendors
Analysis of Findings/ Report Creation
Delivery of Findings/ Conference Call

What We Do

The following VAT services are incorporated into our Virtual Office and Virtual Factory programs. They can also be offered as stand-alone services in the following forms:

VAT Consulting

Contact with relevant authorities to confirm the applicable VAT rebate amount for the given production classification.
Review of current quotations and terms from client’s vendors in order to advise on VAT strategy.
Review of client’s PRC based entities’ business license, tax payer status and scope of business in order to advise on efficiency of VAT processing.
Review of client’s vendor’s business license, tax payer status and scope of business in order to advise on efficiency of China VAT processing.
Provision of “VAT Strategy Assessment and Suggestions” report in an easy to understand, English language format.

Fee Structure for VAT Consulting

Depending on the complexity of the case, most reports can be delivered after an intense 30 day evaluation of the client’s operations. The associated consulting fees range between 8,000 USD and 30,000 USD for most projects. VAT advisory services are provided free of charge to clients who have engaged PassageMaker for the the virtual office or virtual factory service.

VAT Processing

Facilitate a transparent VAT application and organize the refund in full accordance with local regulations to ensure you’re not overcharged by a 3^rd Party or exposed to any unexpected tax liabilities.
On an ongoing basis, we leverage our own VAT licensing to verify rates with the tax bureau and customs authorities. We do this to keep your suppliers honest about VAT and offer full visibility.

Fee Structure for VAT Processing

Depending on the complexity of the case, a small commission is applied to the value of goods processed by PassageMaker on behalf of the client. In this fashion, the client can build in VAT rebate processing as a cost of goods sold. VAT advisory services are provided at a deep discount to clients who have engaged PassageMaker for the virtual office or virtual factory service.

Put simply, our VAT services allow our clients an affordable and transparent way to get on with their businesses knowing that there’s no funny business going on behind the scenes in China!

Additional VAT Resources

Articles:

Check out our extensive archive of VAT-related articles written by the staff at PassageMaker.

Podcast:

An insider’s look at costs, tax benefits, transfer pricing, arm’s length pricing and off shoring when using a HK company to buy from China.