STA Interpretation: Optimizing Services and Regulating Management for the Export of Goods Subject to Domestic Taxation

关于《国家税务总局 财政部 商务部 海关总署 国家市场监督管理总局关于应征国内环节税货物出口优化服务 规范管理有关事项的公告》的解读

Source (Chinese): STA Policy Database — 政策解读 (Goods and Services Tax Division, March 25, 2025)

English translation: Independent translation. Not an official government translation.

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The State Taxation Administration, together with the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation, has issued the Announcement on Matters Concerning the Optimization of Services and Regulation of Management for the Export of Goods Subject to Domestic Taxation (hereinafter the "Announcement"). The interpretation is as follows:

Q1: What is the background for issuing the Announcement?

Answer: To thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council, further optimize the business environment, guide and help taxpayers prevent tax-related risks in the export of goods subject to domestic-stage taxation (hereinafter "domestically taxable goods"), and effectively maintain the order of foreign trade exports, the STA, together with the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation, has issued the Announcement. Through further reaffirming and clarifying the policies and regulations concerning the export of domestically taxable goods, the Announcement publicizes policies to taxpayers, serves and guides them in properly handling relevant export matters, promotes their lawful fulfillment of relevant tax obligations, and jointly advances the high-quality development of foreign trade exports.

Q2: What is the scope of goods subject to domestic taxation upon export?

Answer: In accordance with Article 7, Paragraph 1 and Article 8, Paragraph 1 of the Notice of the Ministry of Finance and the State Taxation Administration on VAT and Consumption Tax Policies for Export Goods and Services (Cai Shui [2012] No. 39) and other existing provisions, the specific scope of goods subject to VAT and Consumption Tax taxation policies upon export is as follows:

Goods subject to VAT taxation policy upon export

1. Goods for which export tax refund/exemption has been cancelled by the Ministry of Finance and the STA pursuant to State Council decisions, exported or deemed exported by export enterprises (excluding goods re-exported after processing with supplied materials, bid-winning electromechanical products, listed raw materials, water/electricity/gas input into special zones, and marine engineering structures).

2. Daily consumer goods and vehicles sold by export enterprises or other entities to entities within special zones.

3. Goods exported by export enterprises or other entities during the period when VAT refund/exemption processing has been suspended by the tax authority due to fraudulent export refund claims.

4. Goods for which export enterprises or other entities have provided false backup documentation.

5. Goods for which export enterprises or other entities have forged or submitted VAT refund/exemption documents with false content.

6. Export cigarettes for which export enterprises or other entities have failed to file for tax-exempt verification within the period prescribed by the STA, or for which the competent tax authority has denied tax-exempt verification upon review.

7. Export goods and services of export enterprises or other entities that fall under any of the following circumstances:

   • (1) Blank export goods customs declaration forms, export foreign exchange verification forms, or other refund/exemption documents have been provided to entities or individuals other than freight forwarding companies or customs declaration agencies with signed entrustment contracts, or freight forwarding companies designated by the overseas importer (with contract stipulation or other relevant proof).

   • (2) Exports made in the enterprise's own name, but the export business is in substance operated and completed by entities or individuals other than the enterprise itself and its invested enterprises, borrowing the export enterprise's name.

   • (3) Exports made in the enterprise's own name, but both a purchase contract and an agency export contract (or agreement) have been signed for the same batch of goods.

   • (4) After customs clearance of export goods, the enterprise itself or its entrusted freight forwarder/carrier has modified the product name, specifications, or other details on the ocean bill of lading or other transport documents for that shipment, resulting in discrepancies between the export goods customs declaration form and the ocean bill of lading or other transport documents.

   • (5) Exports made in the enterprise's own name, but the enterprise does not bear at least one of the following risks for the exported goods: quality risk, collection risk, or refund risk — i.e., the enterprise does not bear liability for the buyer's claims when quality issues arise with the exported goods (except where the contract stipulates the party responsible for quality); does not bear responsibility for non-verification due to failure to collect payment on time (except where the contract stipulates the party responsible for collection); or does not bear responsibility for non-refund resulting from problems with documents, certificates, or other materials submitted for export tax refund/exemption declarations.

   • (6) The enterprise has not substantively participated in export business activities and has accepted and engaged in other export business introduced by intermediaries, yet still exports in its own name.

Goods subject to Consumption Tax taxation policy upon export

Export enterprises that export or are deemed to export goods subject to the Consumption Tax taxation policy shall pay Consumption Tax in accordance with regulations. The Consumption Tax previously levied at earlier stages shall not be refunded, and it shall not be allowed to be credited against Consumption Tax payable on domestically sold taxable consumer goods.

Q3: How should the VAT and Consumption Tax payable on domestically taxable goods upon export be calculated?

Answer: In accordance with Article 7 of the Notice of the Ministry of Finance and the State Taxation Administration on VAT and Consumption Tax Policies for Export Goods and Services (Cai Shui [2012] No. 39), when taxpayers export domestically taxable goods on their own account or through entrustment, the declaration and payment of VAT and Consumption Tax shall follow the unified rules for paying VAT and Consumption Tax on domestically sold goods, specifically as follows:

Calculation of VAT payable

For export goods and services subject to the VAT taxation policy, the VAT payable shall be calculated as follows:

General VAT taxpayers exporting goods:

Output tax = (FOB price of exported goods - Amount of bonded imported materials consumed in processing trade) / (1 + applicable tax rate) x applicable tax rate

Where the non-deductible tax amount has already been calculated based on the difference between the levy rate and the refund rate and transferred to cost, the corresponding tax amount shall be transferred back to input tax.

Small-scale taxpayers exporting goods:

Tax payable = FOB price of exported goods / (1 + levy rate) x levy rate

Calculation of Consumption Tax payable

Consumption Tax is calculated using the ad valorem method, the specific quantity method, or a composite method combining both ad valorem and specific quantity (hereinafter "composite method"). The formulas for calculating the tax payable are:

Ad valorem method: Tax payable = Sales amount x Proportional tax rate

Specific quantity method: Tax payable = Sales quantity x Fixed tax rate

Composite method: Tax payable = Sales amount x Proportional tax rate + Sales quantity x Fixed tax rate

Q4: When should taxpayers exporting domestically taxable goods complete tax registration information confirmation, and what matters require attention?

Answer: Taxpayers engaged in the export of domestically taxable goods, like all other taxpayers, must complete tax registration information confirmation. Specifically, they shall complete tax registration information confirmation and other relevant tax matters through the nationally unified standardized Electronic Tax Bureau or at a tax service hall when the tax obligation first arises, and shall truthfully file tax returns in accordance with the filing deadlines and content requirements prescribed by laws and administrative regulations.

Q5: What are the specific requirements and procedures for issuing the Certificate of Entrusted Export Goods and the Certificate of Agency Export Goods when taxpayers export domestically taxable goods?

Answer: When taxpayers export domestically taxable goods through entrustment, the entrusting party shall, within the period from the date of customs clearance of the goods to the VAT and Consumption Tax filing deadline of the following month, submit the Certificate of Entrusted Export Goods to the competent tax authority, together with a copy of the entrustment/agency export agreement. The competent tax authority shall affix its seal on the Certificate of Entrusted Export Goods after reviewing the entrustment/agency export agreement. The entrusting party shall then forward the Certificate of Entrusted Export Goods to the entrusted party, who shall use this certificate to apply to its own competent tax authority for the issuance of the Certificate of Agency Export Goods.

Q6: Why should taxpayers complete tax registration information confirmation before declaring exports of domestically taxable goods to customs?

Answer: When taxpayers export domestically taxable goods, they have already engaged in tax-related matters at the stage of purchasing goods or procuring raw materials for production. Therefore, they shall promptly complete registration information confirmation with the tax authorities in accordance with the Tax Collection and Administration Law and other relevant regulations. Since taxpayers have already engaged in the above activities when applying to customs for export clearance procedures, they must complete registration information confirmation and other tax-related matters with the tax authorities as required. It should be noted that Article 4 of the Announcement specifies that if a taxpayer has not completed registration information confirmation with the tax authorities, or falls under circumstances of tax anomalies such as deregistration, abnormal status, or absconding (loss of contact), the taxpayer shall complete the handling of relevant tax matters with the competent tax authority before applying to customs for declaration procedures.

Q7: What tax-related matters should taxpayers exporting domestically taxable goods be aware of when applying for deregistration with the market regulation authorities?

Answer: Taxpayers who export domestically taxable goods and wish to apply for deregistration with the market regulation authorities shall first apply to the tax authorities for tax deregistration. After the tax authorities complete the tax deregistration, they shall issue a tax clearance certificate. The taxpayer shall then use this tax clearance certificate to apply for deregistration with the market regulation authorities. To facilitate taxpayers in handling relevant tax matters and simplify the deregistration process, where the market regulation authorities and tax authorities have already shared tax clearance information, taxpayers are no longer required to submit the paper tax clearance certificate.

Q8: What key matters should taxpayers pay attention to at the customs declaration and export stage when exporting domestically taxable goods?

Answer: In accordance with the relevant provisions of the Tax Collection and Administration Law of the People's Republic of China and the Regulations on Implementation of Customs Administrative Penalties of the People's Republic of China, the Announcement reaffirms that taxpayers exporting domestically taxable goods, customs declaration enterprises, customs declaration personnel, and other relevant entities and individuals shall not forge, alter, or trade customs declaration forms, shall not fabricate export transactions, and shall not overstate or understate the value of goods. Where any of the above illegal activities exist, or where assistance is provided in carrying out the above illegal activities, the relevant authorities shall handle the matter in accordance with their respective responsibilities pursuant to the Tax Collection and Administration Law, the Regulations on Implementation of Customs Administrative Penalties, and other applicable laws and regulations. Where the illegal conduct constitutes a crime, the case shall be transferred to the judicial authorities for criminal prosecution in accordance with the law.