Overseas Tourists Tax Refund In China: Buy Now and Return Now

To further enhance the convenience of tax refunds for shopping abroad and optimize the consumption experience of overseas tourists, the State Administration of Taxation has issued the "Announcement of the State Administration of Taxation on Promoting the "Buy Now, Get Now" Service Measures for Tax Refunds for Shopping by Overseas Tourists" (hereinafter referred to as the "Announcement"). The relevant contents are interpreted as follows:

1. What is a departure tax refund?

Departure tax refund refers to the refund of value-added tax on tax-refundable items purchased by overseas travelers at the departure port.

Overseas travelers refer to foreigners and compatriots from Hong Kong, Macao and Taiwan who have lived in China for no more than 183 consecutive days.

2. What is the departure tax refund "buy now and refund now"? What conditions do overseas travelers need to meet to enjoy this service?

The departure tax refund "buy now and refund now" service measure (hereinafter referred to as departure tax refund "buy now and refund now") is a facilitation measure for departure tax refund. It means that when overseas travelers purchase tax-refundable items at a "buy now and refund now" store in a region where the departure tax refund policy has been implemented, they can apply for RMB funds (hereinafter referred to as advance payment) equal to the tax refund amount on the spot at the "buy now and refund now" store after signing an agreement and applying for credit card pre-authorization.

Foreign travelers who enjoy this service measure must meet the following conditions: pass customs inspection upon departure, leave the country at the designated port within the promised period as agreed in the agreement, and comply with the policy regulations of the departure tax refund.

3. What conditions must be met for items that can enjoy the departure tax refund "buy now and refund now"?

All tax refund items subject to the current departure tax refund policy belong to the departure tax refund "buy now and refund now" category.

4. What conditions must be met to become a "buy now and refund now" store?

Tax refund stores in areas where the departure tax refund "buy now and refund now" has been implemented and are willing to provide "buy now and refund now" services, can become "buy now and refund now" stores after reaching an agreement with local tax refund agencies on matters such as prepayment.

5. The process of foreign travelers handling the departure tax refund "buy now and refund now"

For foreign travelers who enjoy the departure tax refund "buy now and refund now", there are mainly three links involved in handling this business: First, the store opens a bill and prepays. After the overseas travelers who apply for the departure tax refund "buy now and refund now" sign the agreement, the store will handle the credit card pre-authorization procedures for the overseas travelers, issue the "Overseas Traveler Shopping Departure Tax Refund Application Form", and pay the advance payment on the spot. Second, the customs will conduct verification. Overseas travelers who enjoy the departure tax refund "buy now and refund now" should declare to the customs and accept customs verification when leaving the country with the tax-refund items, the "Overseas Traveler Shopping Departure Tax Refund Application Form", the tax-refund item sales invoice and their valid identity documents. Third, the tax refund agency will review. Overseas travelers should submit their passports and other valid identity documents, the "Overseas Traveler Shopping Departure Tax Refund Application Form" with customs verification and stamp, and the tax refund item sales invoice to the tax refund agency in the isolation area of ​​the departure port. The tax refund agency will review the relevant materials and information. Suppose the passenger leaves the country at the designated port within the promised period as agreed in the agreement and complies with the current departure tax refund policy. In that case, the tax refund agency will cancel the credit card pre-authorization for the passenger, complete the tax refund matters, and the advance payment will be deemed to have been refunded.

6. What is an agreement? Must the agreement be signed by the foreign traveler himself?

The agreement is signed by the foreign traveler who chooses to enjoy the departure tax refund "buy now and refund now", declaring that he is aware of the rights and responsibilities of the departure tax refund "buy now and refund now", promising to leave the country from the designated port within the agreed period, and agreeing to obtain the advance payment in accordance with the agreed limit and payment method with the credit card pre-authorization as a guarantee. The agreement is provided to foreign travelers free of charge by the "buy now and refund now" store.

The agreement must be signed by the foreign traveler himself. The "buy now and refund now" store or the tax refund agency should properly retain the agreement signed by the foreign traveler. The retention unit of the agreement is determined by the "buy now and refund now" store and the tax refund agency.

7. What is credit card pre-authorization?

Credit card pre-authorization means that the store or agency pays the prepayment to the foreign traveler who enjoys the departure tax refund "buy now and refund now" and freezes the corresponding amount on his credit card.

Credit card pre-authorization is handled by the "buy now and refund now" store or tax refund agency for overseas travelers. The pre-authorization amount should be equal to the prepaid amount applied for. The cancellation and deduction of credit card pre-authorization of overseas travelers shall be the responsibility of the tax refund agency that provides the "buy now and refund now" service for departure tax refund at the location of the "buy now and refund now" store. The "buy now and refund now" store and the tax refund agency should properly retain the bank documents related to the credit card pre-authorization business.

8. What is a prepaid deposit? What are the ways for overseas travelers to obtain prepaid deposits?

Prepaid deposits are RMB payments made to overseas travelers who enjoy the "buy now and refund now" service for departure tax refunds at the "buy now and refund now" store, which are equal to the tax refund amount. Specific forms include cash payment and electronic payment.

The prepaid deposit is paid in advance by the "buy now and refund now" store or the tax refund agency. The advance payment party, specific form and limit standard shall be determined by the provincial tax bureaus, the "buy now and refund now" store and the tax refund agency through consultation.

9. How should the amount of advance payment obtained by overseas travelers be calculated?

The amount of advance payment that overseas travelers can obtain is the actual amount of VAT refunded calculated based on the amount of VAT ordinary invoice (including VAT) of the tax-refundable items, that is:

Amount of advance payment = actual amount of VAT refund

Actual amount of VAT refund = amount of sales invoice of tax-refundable items (including VAT) × tax refund rate - tax refund agency’s tax refund handling fee

10. What should be done if overseas travelers fail to fulfill the agreement, exceed the promised period or fail to leave the country from the designated port?

If the travelers fail to fulfill the agreement, exceed the promised period or fail to leave the country from the designated port, the tax refund agency will recover the advance payment through credit card pre-authorization deduction within 3 working days from the date when the promised departure period of the travelers expires. When the travelers actually leave the country, the tax refund agency at the departure place will review and handle the tax refund in accordance with the current regulations.